Preamble

The House met at half-past Two o'clock

Preamble

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Dipped Headlights

Miss Fookes: asked the Secretary of State for Transport what representations he has received about the need to make the use of dipped headlights compulsory in built-up areas.

The Under-Secretary of State for Transport (Mr. John Horam): Representations have been made, mainly by a body called the Night Safety Advisory Bureau, that I should make it compulsory to use headlamps in built-up areas at night. I am not convinced that it would be right to introduce this new element of compulsion.

Miss Fookes: Are not uniformity and simplicity in road traffic law to be desired? Would it not be more convenient for everyone if sidelights were used only for parking and dipped headlights were used at all other times?

Mr. Horam: I agree with the hon. Lady that simplicity and uniformity are desirable aims. On the other hand, I do not think that the motorist should be over-regulated in circumstances in which his common sense can be trusted. The rules are perfectly clear, and the advice in the Highway Code is worth following.

Mr. Mawby: Will the hon. Gentleman consult the many bodies that believe that there should be a change in the law, so that at least he will learn their opinions?

Mr. Horam: I shall keep a watch on the matter. As the hon. Gentleman said, a number of groups have made representations, particularly the one I men-

tioned, and also the motoring organisations. I shall keep the matter under review, but I do not feel that there should be a change at present.

Mr. Lawrence: Is the Minister's commendable refusal to use compulsion a policy that he will consistently follow in other aspects of policy in his Department?

Mr. Horam: I believe that it is always a mistake to use compulsion, unless one has failed by voluntary means to achieve one's object.

Commuters

Mr. McCrindle: asked the Secretary of State for Transport what recent discussions he has had with bodies representing commuters.

Mr. Horam: None just recently. British Rail, of course, has frequent contact with local commuter associations.

Mr. McCrindle: Commuters have probably suffered more than most from recent industrial disputes. Will the Minister intercede on their behalf in an attempt to make it possible that, on days when there are no British Rail services, season tickets can be used on comparable stretches of the London Underground services? Is the Minister aware that ASLEF is opposed to that suggestion on the basis that it would be strike-breaking by London Underground drivers? As intercession appears necessary, will the Minister undertake it, because I am told that British Rail approves of the idea?

Mr. Horam: I foresee complications in pursuing such a course. However, it is an interesting suggestion and I should like to examine it more carefully.

Mr. Newens: Will my hon. Friend keep his eye on the discussions taking place between his Department and the various authorities that are concerned in determining where the public financial support will come from to keep open the Epping Ongar section of the central line? Many commuters depend on that section, both those in the constituency of the hon. Member for Brentwood and Ongar (Mr. McCrindle) and those in my constituency. Is the Minister aware that many of those constituents are concerned because of the delay in resolving the matter?

Mr. Horam: My hon. Friend was present at a meeting that was also attended


by Opposition Members. There is a problem with the out-county services—London Transport services operating beyond the borders of the GLC. Machinery has been set up for discussions with the counties concerned—Hertfordshire, Buckinghamshire and Essex. That is making reasonable progress. However, I shall watch it carefully to ensure that there will be results soon.

Mr. Moate: Does the Under-Secretary of State recognise the extent to which the commuter has suffered during recent industrial unrest from cancellations, disruptions and delays and the recent fare increase? Does he recognise that there is a limit to how much the commuter can stand in deteriorating services and rising fares without British Rail suffering long-term damage from the loss of revenue and diminution of passenger traffic?

Mr. Horam: I recognise and agree with the hon. Gentleman's point, which causes my right hon. Friend and myself considerable concern.

Humber Bridge

Mr. Brotherton: asked the Secretary of State for Transport what is the latest estimate of the cost of the Humber Bridge.

Mr. Horam: The latest estimate by the Humber Bridge Board is £66·2 million.

Mr. Brotherton: Does the hon. Gentleman agree that it is more than likely that my original forecast of four years ago that the cost of the bridge will be nearer £90 million than the original estimate of £19 million will prove to be correct? Is he satisfied that any of the road communications to the south of the bridge will be required to cope with the traffic that uses the bridge?

Mr. Horam: The increase on the last figure that I gave the hon. Gentleman is mainly taken care of by the rate of increase in inflation during the previous 12 months. It is not a higher figure in real terms, and the hon. Gentleman should be made aware of that. He should also be aware that road works on the south bank of the Humber are among the largest in the country. Considerable progress is being made in improving communications with the Grimsby, Immingham and Louth areas.

Mr. John Ellis: Is my hon. Friend aware that the hon. Member for Louth (Mr. Brotherton) is an extremely Right-wing Conservative and that his concern is that the height of the bridge above the tide at all levels should be sufficient to allow the passage of gunboats?

Mr. Horam: I thought that my hon. Friend was more concerned with the Humber ferry than with gunboats.

Sir Paul Bryan: Does the Minister realise that the rising cost of the bridge has led to fears on Humberside that the tolls will be so high that the bridge will be little used? Are there any prospects of an EEC grant to make some impact on the tolls?

Mr. Horam: That is another interesting suggestion and I am sure that my right hon. Friend the Secretary of State would like to look at it when discussing EEC transport infrastructure grants, which are a point at issue within the Common Market. The hon. Gentleman will know that we have other projects in mind for those funds. We were not necessarily thinking of the Humber bridge, but the hon. Gentleman has made an interesting point.

Road Haulage Association

Mr. Adley: asked the Secretary of State for Transport when he intends next to meet representatives of the Road Haulage Association.

The Secretary of State for Transport (Mr. William Rodgers): Whenever the need arises.

Mr. Adley: Is the right hon. Gentleman aware that the members of the RHA in and around my constituency and their drivers were extremely concerned about the activities of certain pickets during the recent industrial dispute? Does he agree that some of those activities were unacceptable in a civilised democracy? If so, can he tell the RHA and the House whether, and how, the new concordat which the Government have reached with the TUC will change the situation?

Mr. Rodgers: There was a widespread view that some, though by no means all, of the activities of pickets caused concern. Both the TUC and others have learned from that experience, and if another such occasion should arise—I


hope that it will not—we shall see whether the agreement with the TUC reduces, as I believe it will, some of the anxieties.

Mr. Gould: Does my right hon. Friend recognise that the Road Haulage Association and the transport unions are apparently united, for once, on the tachograph issue, and that they all agree that the proposal is unnecessary, inappropriate and damaging? Will he therefore ensure that the issue is brought back to Parliament so that we can decide what is or is not law in this country?

Mr. Rodgers: Any final decision on tachographs will be one in which Parliament is involved. There is no doubt about that. I understand what my hon. Friend said in the earlier part of his question. There has been anxiety about tachographs. I have made my view clear, but we must consider the judgment of the European Court.

Mr. Norman Fowler: May I press the Secretary of State further about industrial action? Is he aware that, as my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) said, the public were appalled at the unacceptable picketing that took place during the recent dispute, particularly at the ports? Does the new concordat mean that the Government intend, and the unions accept, that in any future road haulage dispute the picketing of ports should not take place?

Mr. Rodgers: I hope that the hon. Gentleman and the House are familiar with the agreement and its precise terms. There is an annexe dealing with the issues mentioned by the hon. Gentleman, and it is very much in the terms of the TUC's view. My opinion is that if we have such circumstances again—and I hope that we shall not—the control of pickets will be such as to make unnecessary the anxieties that existed previously.

Mr. Madden: Would the Secretary of State care to compare the additional cost to the industry of the recent settlement with the additional cost that would fall on the industry from the general introduction of the tachograph and limits on drivers' hours, both of which are being pressed on us by the Common Market?

Mr. Rodgers: Comparisons of costs in the industry are highly complicated,

and there is a later question on the Order Paper by the hon. Member for Totnes (Mr. Mawby) dealing with that aspect of the industrial dispute. We have all recognised that the introduction of limitations on drivers' hours has some penalty, but my view is that it is much smaller than was once supposed.

Mr. Temple-Morris: Does the Secretary of State agree that we must do our utmost to avoid a repetition of the recent damaging dispute? In view of what the right hon. Gentleman said to the nation about a month ago, does he still believe that the best way of avoiding another damaging dispute is to introduce a statutory incomes policy?

Mr. Rodgers: I expressed a personal view about the possibility, in certain circumstances, that statutory policies might be required, but I think that developments since then, particularly the agreement with the TUC and the very much more hopeful mood in the country, sustain the view that there is a genuine prospect of getting the present pay round completed very close to the Government's original guidelines.

M6, Birmingham (Compensation Payments)

Mr. Rooker: asked the Secretary of State for Transport how many persons received compensation under part I of the Land Compensation Act in respect of the M6 motorway in Birmingham.

Mr. Horam: So far, 1,655 claims have been paid. Some of those have related to more than one property.

Mr. Rooker: Does my hon. Friend accept that that figure should be at least 200 higher because 200 families in my constituency did not have the chance to claim as they did not understand the rules in 1975? Will he repeat the commitment given to me in August that, now that the Select Committee on the Ombudsman has reported on the Rochester Way case, the residents affected by the M6—in exactly the same circumstances—will receive consideration at the same time?

Mr. Horam: Certainly. My hon. Friend has raised an important point. The Select Committee has expressed its view on the matter clearly. My right hon. Friend and I will study the Select Committee report carefully, both on the general issue of


whether there is inadequate publicity, which relates to the whole country, and on particular issues, whether in my hon. Friend's constituency or in any other. We shall do that as soon as possible. I know that my right hon. Friend is anxious to do so. It is important that the matter should be settled as soon as possible.

Mr. Peter Bottomley: What about the residents of the other part of the Rochester Way, who are affected by new road building on either side—

Mr. Speaker: Order. I suggest that the hon. Gentleman puts down a question about that matter.

Roads (Maintenance)

Mr. Charles Morrison: asked the Secretary of State for Transport whether, in view of the severe weather, he is satisfied that sufficient funds are available for road maintenance.

Mr. Horam: We have increased the funds for maintenance in the latest annual settlement and I believe that the total is broadly right in normal circumstances. However, in view of the severe weather conditions over the past few weeks the Government have decided to make additional financial assistance available to local authorities, as my right hon. Friend the Minister of State, Department of the Environment has indicated.

Mr. Morrison: Is it not a fact that, according to the White Paper on public expenditure, funds for the maintenance of motorways, trunk roads and local roads have been cut and are proposed to be cut still further? Will the hon. Gentleman ensure that the funds that are available are used? That is particularly important in present circumstances. I understand that in recent years available funds have not been used for maintenance to the extent that was planned.

Mr. Horam: The hon. Gentleman is correct in saying that there have been cuts in maintenance funds in the past, but, as I indicated in my main answer, there has been an increase for next year compared with this year, and we do not anticipate any further cuts. We hope that the level will be roughly stable. There has been some underspending in the past, though that is the responsibility of the local authorities, which carry out the

maintenance work throughout the country. I understand from the latest estimates that there is much less underspending in the current financial year.

Mr. R. C. Mitchell: How will my hon. Friend ensure that the additional money which he is allocating to local authorities for road maintenance is spent for that purpose? Does he intend to introduce some sort of monitoring system to ensure that it is spent in the right direction?

Mr. Horam: We have done precisely that. Three years ago we set up machinery to look at the spending on maintenance and the needs for repair work throughout the country. It is a sampling system covering, I think, 61 different parts of the country, and generally it ensures that we are kept in close touch both with what is necessary and with the level of spending.

Mr. Stephen Ross: Does that mean the Minister is confirming that the criteria for giving additional money towards road maintenance are over and above the expenditure of a penny rate on the part of the local authority concerned? Is the hon. Gentleman aware that many local authorities, my own included, have announced rate increases over and above 30 per cent., about which ratepayers are already in revolt? Due to the weather conditions—and I accept that in my constituency the Secretary of State was very generous this year—is the Minister prepared to give additional money without that restriction?

Mr. Horam: I think that we must stick to the formula which has been applied in the past. Last year, for example, local authorities up and down the country, though mainly in the West Country and East Anglia, received additional funds from the Government under the formula which my right hon. Friend the Minister of State, Department of the Environment reiterated the other day, namely, 75 per cent. over and above a penny rate.

Road Haulage (Dispute)

Mr. Rhodes James: asked the Secretary of State for Transport whether he will make a statement on the recent road haulage dispute.

Mr. William Rodgers: There is nothing significant I can add to what I


said at the time and have already said this afternoon. I greatly regret that it took place and resulted in so much inconvenience and disruption.

Mr. Rhodes James: Has the right hon. Gentleman any estimate of the approximate total cost of this dispute to British industry?

Mr. Rodgers: It is extremely difficult to measure the total costs. The industry is made up of many small firms. They are at present assessing the cost. As I said earlier, there is a later question on the consequences for charges.

Mr. Rooker: Can my right hon. Friend say how many food shops ran out of food during the dispute, how many people died of starvation, and how many million workers were laid off? Has he those figures? If he has not, does he accept that no one knows of a single food shop which ran out of food, that no one died of starvation, and that only 200,000 workers were laid off?

Mr. Ashton: One per cent.

Mr. Rodgers: If I may be allowed to join in, I think that the implication of my hon. Friend's supplementary question is right. No shops closed as a result of the dispute. I am very glad that no one starved to death. At one stage it was suggested that many more people would be laid off than were. That is not to say, however, that the strike was not damaging, that much inconvenience was not caused, and that a great deal of anxiety did not result from it. I regret that. Equally, I regret the hysteria which occurred at the time in some quarters.

Mr. Fry: Does the Secretary of State think that some apology is due to the employers in the road haulage industry for the rapid changes that occurred in Government policy, mainly resulting from the problems experienced, whereby first the industry was threatened that if it went above 5 per cent. action would be taken about its charges, and then when the strike hit the Government were desperate that it should be settled at any cost?

Mr. Rodgers: No. The hon. Member is sometimes more reasonable than others of his hon. Friends, but he is now being rather silly. There were no changes in Government policy. I and the Government would have very much preferred to

see a settlement within the guidelines of 5 per cent. The RHA moved very quickly to an offer of 15 per cent. As I made clear in the House time and time again, I could not endorse that. In the end, of course, the parties settled at a very much higher figure.

Vehicle Excise Duty

Mr. Newton: asked the Secretary of State for Transport if he will make a statement on his progress in consultations about his proposals concerning the future of vehicle excise duty.

Mr. Richard Page: asked the Secretary of State for Transport what further representations he has received on the proposed abolition of vehicle excise duty.

Mr. Charles Irving: asked the Secretary of State for Transport what further representations he has received on the proposed abolition of vehicle excise duty.

Mr. Horam: We issued a discussion paper earlier this month on the timing of the change; I hope to have comments shortly.

Mr. Newton: In view of what has happened in Iran and the possible consequences for petrol prices arising from other factors, is the Minister as confident as he was last year when this paper was first published that this is a sensible policy?

Mr. Horam: In many respects, events have rather reinforced the conservation aspect of the policy. If we are to live in a world of unforeseeable shortages, the sooner we get to a rational policy on this, the better. I think that that has the support of both sides of the House.

Mr. Page: Does the Minister accept the concern felt in some rural districts about the possible cost of these proposals, and will he carry out a full evaluation of those concerns before proceeding further?

Mr. Horam: I accept that we should evaluate carefully what will happen in the rural areas as a result of this change. I must repeat to the House a point which has been made before, namely, that the majority of rural private motorists will gain from this change. In any case, the change will be very small in its total effect.

Mr. Irving: How does the Minister propose to assist the disabled, whose vehicle licence tax is already remitted?

Mr. Horam: That is one of the subjects that we shall consider during our consultations, although it is fair to say that the disabled have an advantage now over the rest of the community.

Mr. Ashton: Is my hon. Friend aware that Bassetlaw is a rural area and that his proposals in general have been welcomed by working-class people in the area who run old bangers to get to work rather than Jaguars such as those owned by Opposition Members, and who very much prefer to pay the road tax weekly rather than every four months or once a year, because that is all they can afford?

Mr. Horam: I could not have put it better.

Mr. Ronald Atkins: Does my hon. Friend agree that his proposals are much fairer than the present system, will conserve petrol, and will lead to a large reduction in the kind of Government expenditure which the Opposition are always demanding?

Mr. Horam: I am glad to have my hon. Friend's distinguished support in these matters.

Mr. Grimond: Is the Minister aware that these proposals were popular in many parts of my constituency but that since then, as has been pointed out already, we have had the trouble in Iran and strikes, and petrol is already 10p per gallon more in my constituency than it is in the South of England? Will he make that known to the Chancellor of the Exchequer and also consider whether this is a matter that the Price Commission might examine?

Mr. Horam: The right hon. Member makes a very interesting point. The differential in the prices of petrol sold in rural and urban areas is a matter of legitimate concern.

Mr. Moate: Does the Minister accept that there are rumours that petrol will cost £1 a gallon, and sooner in some areas than in others, and that his proposals will make petrol, even in current terms, £1·20 a gallon, plus perhaps an annual registration tax at a level which is still a Government secret? Does he recognise

that this will impose an unacceptable burden on many motorists, especially in rural areas, where people depend on their own transport to get to and from work?

Mr. Horam: I do not agree with the hon. Gentleman. People in rural areas will be saving the £50 vehicle excise duty. This has a considerable advantage not only for the person who does a reasonable mileage but also in the sense that it is easier to buy a car in the first instance and keep it on the road with that much less to pay. Therefore, on balance the rural motorist will gain, not lose.

Roads (Gritting and Salting)

Mr. MacKay: asked the Secretary of State for Transport whether he is satisfied with gritting and salting of roads so far in 1979.

Mr. William Rodgers: No, Sir.

Mr. Andrew MacKay: Is the Secretary of State aware that in the Birmingham area the motorways have been in a very dangerous state during the past few months, especially because of the lack of gritting and salting as a result of NUPE action? This has resulted in far more accidents and greater danger to motorists travelling on these motorways. Does he agree that he has a responsibility to ensure that the roads are safe? If so, will he ensure that in future volunteers are allowed to grit roads when there is action of the kind to which I have referred?

Mr. Rodgers: Probably there are lessons to be learnt by us all from the experience of the past few weeks, with very exceptional weather and additional difficulties caused by industrial disputes. I am not responsible for all the roads in the United Kingdom. If I pretended that I was, I should be immensely unpopular with local authorities, which like to handle these matters themselves. My main concern has been to keep open motorways and trunk roads as far as possible. In general, we have been successful in that. I could not be satisfied if roads were closed, were dangerous or were inconvenient to travellers.

Mr. Arthur Latham: Has my right hon. Friend seen the motion on the Order Paper congratulating bus drivers on keeping vehicles on the road despite the unevenness of salting and gritting? Will


he acknowledge that many more elderly people might have been riding on those buses if the Government's proposals for a national concessionary fares scheme had been implemented? Can he give any indication when this welcome scheme—a major step forward—will be the subject of a statement so that we can ask questions about it?

Mr. Rodgers: I am most grateful to my hon. Friend, who has been peculiarly friendly today. He is right to say that buses managed to run, often in difficult conditions. If he refers to my Green Paper, published on Monday, he will see that it is hoped to introduce a national concessionary fares scheme as soon as we can get it through the House of Commons.

Driving Tests (Exeter)

Mr. Hannam: asked the Secretary of State for Transport what is the current waiting time for a driving test in the Exeter area; and how this compares with that for Great Britain as a whole.

Mr. Horam: 26 weeks, compared with 22½ weeks for Great Britain as a whole.

Mr. Hannam: Is it not scandalous that in this self-financing scheme we should be so short of examiners? Why has this happened? Why has the offer to become test examiners by several driving instructors in my constituency been turned down?

Mr. Horam: I would like to look into the second point, if the hon. Gentleman would supply me with the details. The problem has been a big increase in demand for tests, starting roughly in the spring of last year.

Mr. Michael McNair-Wilson: Does the Minister consider it fair that those who wish to take the test should be required to send a cheque with their application although they may be asked to wait three or four months before actually taking the test? Why should they not pay for the test when they take it?

Mr. Horam: That is another interesting point. I would like to look into it.

European Community (Railways)

Mr. Spriggs: asked the Secretary of State for Transport what is the total track

mileage of each railway system in each European Economic Community country and the extent of Government subsidies made in each instance, respectively, in the last two years for which this information is available; and if he will make a statement.

Mr. Horam: The latest years for which this information is available are 1974 and 1975 and I will arrange for it to be published in the Official Report. Great care is needed in interpreting international comparisons of this kind.

Mr. Spriggs: Is my hon. Friend aware that the Government are again freezing British Rail investment this year to £312 million, while the smaller Italian railway network is investing £480 million for the same period? Why cannot British Rail have that kind of investment?

Mr. Horam: I would prefer to put the matter in different terms. I do not think that we are freezing investment. We are keeping it stable. That is a very satisfactory approach in present circumstances. I would also point out to my hon. Friend that it is difficult to make proper international comparisons. The large sums sometimes quoted in France and West Germany reflect different circumstances.

Mr. Forman: Does the Minister accept that one of the main causes of decreased revenue for British Rail and the possible need for increased subsidy has been inter-union disputes? What action is his Department taking to encourage the formation of a single union throughout the railway industry on the Continental pattern?

Mr. Ronald Atkins: It is not his responsibility.

Mr. Horam: As my hon. Friend says, that is not a question for my right hon. Friend.

Mrs. Dunwoody: Is my hon. Friend aware that British Rail compares favourably with other EEC rail systems? If it is to be kept in the forefront it must have money to invest in new stock and improvements. Will he make sure that so far as possible that money is available.

Mr. Horam: Yes. My right hon. Friend and I have made clear that we attach great importance to maintaining


the right level of investment in British Railways. As my hon. Friend knows, we have made available a new grant for the renewal of assets for passenger business, which has been welcomed by British Rail. We have undertaken to keep investment at a stable level for the foreseeable future.

Drivers' Hours (Community Regulations)

Mr. Marten: asked the Secretary of State for Transport if he will make a statement about drivers' hours and the European Economic Community regulations relating thereto.

Mr. William Rodgers: Regulation 543/69 has applied to international journeys by United Kingdom registered vehicles since April 1973, and is being applied, on a staged basis, to internal journeys over a three-year period ending on 31 December 1980.

Mr. Marten: Is the Minister aware that the latest estimate of the cost of introducing these hours and restrictions is £350 million, with a 15 per cent. loss in productivity? As both the increased cost and the loss of productivity are policies which this Government—or any Government—should not follow in this country, will he not allow these regulations and directives to operate here?

Mr. Rodgers: I was not aware of those estimates. They sound vaguely familiar to me. I did not know that they were recent estimates. As I said in reply to an earlier supplementary question, I believe that there was a good deal of exaggeration—I blame no one for that—at a time when we were negotiating the introduction of these regulations. It is possible to argue that we wish that they did not exist. In all the circumstances, I think that the staged introduction has been widely welcomed as the best outcome of a difficult problem.

Mr. Spearing: Can my right hon. Friend say to what extent the question of drivers' hours is related to weights of vehicles, particularly increased maximum weights? Will he confirm that the latest proposal of the EEC Commission is for universal licences for vehicles of 44 tons, which would be 12 tons more than is allowed in the United Kingdom?

Mr. Rodgers: The reply to the first part of my hon. Friend's question is that there is no connection between these two considerations. He is right in saying that there is pressure from the Community to move to larger and heavier lorry weights. I have made plain to the Council of Ministers, and in the House, that that is unacceptable to the Government. I repeated that to my colleagues in Brussels yesterday afternoon.

Driving Tests (Cambridgeshire)

Mr. Freud: asked the Secretary of State for Transport what is the current waiting time for a driving test in Cam bridgeshire; and how this compares with the position in Great Britain as a whole.

Mr. Horam: 16 weeks, compared with 22½ weeks for Great Britain as a whole.

Mr. Freud: The House will welcome the fact that the waiting time has not increased since the Minister answered question No. 10. Sixteen weeks is fractionally better than the average. As the Government are in the business of job creation, will the Minister consider appointing more examiners? Is he aware of the abuse of the procedure by driving instructors and driving schools, which manage to circumvent or cheat on the waiting lists? What will he do about that?

Mr. Horam: I shall certainly look into any allegations which the hon. Gentleman can substantiate. I should be interested to do so in the general public interest. With regard to recruiting more examiners, we are about 400 under complement. We have about 140 trained examiners. It takes about six months to train examiners from the time the advertisement appears in the newspapers. About 140 have come into the ranks, which leaves roughly 260 to go. We are recruiting steadily.

British Railways Board

Mr. Tim Smith: asked the Secretary of State for Transport when he expects to meet the chairman of the British Rail ways Board.

Mr. Goodhart: asked the Secretary of State for Transport when he will meet the chairman of British Railways.

Mr. William Rodgers: Soon.

Mr. Smith: When the Secretary of State meets the chairman of British Rail, will he discuss the latest delay to the advanced passenger train project? Apparently, as part of the present industrial action, drivers in Scotland are refusing to operate the train on trials. Will the right hon. Gentleman seek ways to ensure that the industrial dispute is not allowed to spill over and affect the advanced passenger train project?

Mr. Rodgers: Yes. I am sure that this is a matter about which I should speak to the chairman. I have seen a report to the effect that there has been a delay today. I have not had the opportunity of substantiating it. I would regret, as I am sure the whole House would, any delay in the introduction of an important new technological development which will do a great deal for British Rail.

Mr. Goodhart: When the Secretary of State discusses the next inevitable round of fare increases with the chairman of British Rail, will he remind the chairman that the rail commuters of southern London have had to pay unprecedentedly large fare increases in recent years? They have also had to put up with unprecedentedly calamitous industrial disruption in recent weeks. The commuters of southern London deserve some compensation for their present hardships.

Mr. Rodgers: The chairman of British Rail is fully aware of the anxiety felt on both sides of the House about the problems that the commuter faces, not only because of the increase in fares from time to time—which everybody who uses the railways must inevitably bear at a time when prices continue to rise too fast—but because of the special inconvenience of travelling in London and the South-East. The chairman is aware of that, and I am sure that he will do his best to remedy the situation.

Mr. Arthur Lewis: When the Secretary of State meets the chairman, will he see that the chairman makes a really loud announcement—not like the muted one that he has made—to the effect that season ticket holders who have lost their train service because of industrial disputes or otherwise can claim either cash and/or an extension of their season tickets to make up for the inconvenience that they have suffered? Will he ensure that

this is widely publicised, because hardly anyone in the House or the country knows that to be the case?

Mr. Rodgers: My hon. Friend makes a very fair point. I remember that when I answered a supplementary question some weeks ago it caused surprise on both sides of the House that this provision existed. I shall draw the attention of the chairman to what my hon. Friend has said.

Mr. Bowden: The next time the right hon. Gentleman sees the chairman, will he discuss with him his Green Paper on concessionary fares for the elderly? Can he give both the chairman and this House some idea of how he thinks the half-price local fare can be financed?

Mr. Rodgers: Yes, I hope that British Rail will be giving evidence to me as a result of the consultation which the Green Paper has introduced. If this were the appropriate moment, I would say that I would greatly welcome any comments from hon. Members upon this important issue as it affects rail as well as bus services.

Mr. Ovenden: Does my right hon. Friend find it strange that hon. Members opposite, such as the hon. Member for Beckenham (Mr. Goodhart), should criticise the increase in prices on British Rail while at the same time calling for cuts in public expenditure and, necessarily, for cuts in subsidies? By what amount have the Government increased subsidies to British Rail and what would have been the effect on prices had that action not been taken?

Mr. Rodgers: My hon. Friend is right to draw attention to this fact. There are no two ways about it: either we have an increase in fares—although I should want to see it at the minimal level consistent with the railways meeting their obligations—or we have an increase in revenue support. I have tried to stabilise that revenue support and give the railways the maximum opportunity of becoming increasingly cost effective. I think that that will be widely welcomed.

Mr. Norman Fowler: Given that the only effect of a large pay settlement will be even higher fares, does the Secretary of State still look for a pay settlement of


well under 10 per cent. in the railway industry?

Mr. Rodgers: Yes, indeed I do.

British Railways (Dispute)

Mr. Durant: asked the Secretary of State for Transport what the recent dispute on the railways is estimated to have cost British Railways.

Mr. William Rodgers: I understand that the Board's present estimate is £14 million.

Mr. Durant: Is the right hon. Gentleman aware that my constituents are fed up with industrial troubles which result from an inter-union dispute and which have nothing to do with pay policy or anything else? Will he tell the union leaders when he meets them that losses such as he has mentioned will put back the capital investment that the hon. Member for St. Helens (Mr. Spriggs) is so anxious to advance?

Mr. Rodgers: I have said before in the House, and I shall say again, that there is no question of the Government baling out the railways, regrettable though that might appear, if, as a result of industrial disputes or an excessive pay claim, they cannot maintain their services. Everybody who works on the railways knows that. In fairness, I should say that the great majority of railway men appreciate this and are anxious to give an increasingly good service to the public.

Mr. Bagier: Does my right hon. Friend agree that the industrial tribunal which is sitting at the moment is doing its best to resolve the differences among the parties involved? One regrets that this amount of money has been lost, but will my right hon. Friend confirm that British Rail's recent performance has managed to wipe out the tremendous deficit that it was running on freight and that it is working well within its cash limits on the PSO?

Mr. Rodgers: I am happy to confirm that. British Rail has won a great measure of support—I should like to believe on both sides of the House—as a result of its performance in recent months. Much of this is to the credit of the chairman of British Rail and the leadership that he has given to the whole industry. We have a great deal to be proud of. I hope

that we shall sustain it and improve the position still further.

Transport and General Workers' Union

Mr. Skeet: asked the Secretary of State for Transport when he expects to meet the general secretary of the Trans port and General Workers' Union.

Mr. William Rodgers: I have no immediate plans to do so.

Mr. Skeet: I hope that when the Secretary of State has a word with the general secretary he will draw his attention to the fact that 12 members of the Cabinet are alleged to have been sponsored by trade unions, and if he will also draw his attention to the fact—

Mr. Speaker: Order. Will the hon. Gentleman put it in the form of a question? It makes things more respectable.

Mr. Skeet: Will the right hon. Gentleman also draw the general secretary's attention to the fact that his own union sponsored the Secretary of State for the Environment and the Secretary of State for Energy—[HON. MEMBERS: "Wrong."]—and does he agree that this practice should be discontinued because it could lead to unfairness in dealing with industrial disputes?

Mr. Rodgers: No, I would not propose to speak to him in those terms. This is all on the record much more accurately than the way in which the hon. Gentleman has presented it to the House. I am sponsored by a trade union—not, as it happens, by that of which Mr. Moss Evans is the general secretary—and I find no conflict of responsibilities or obligations, and I do not believe that my colleagues find such a conflict either.

Mr. McNamara: Is my right hon. Friend aware that many hon. Members behind him think that the quality of the Cabinet would be enhanced and improved if it contained more sponsored members of the TGWU?

Road Haulage (Charges)

Mr. Mawby: asked the Secretary of State for Transport what he estimates will be the average increase in haulage charges resulting from the recent haulage dispute.

Mr. Montgomery: asked the Secretary of State for Transport what he estimates will be the average increase in haulage charges resulting from the recent haulage dispute.

Mr. William Rodgers: The settlement seems likely to raise the industry's costs on average by about 8 per cent. but it is not possible to predict at this stage how this will be reflected in charges to its customers.

Mr. Mawby: I am grateful to the right hon. Gentleman. Has he also taken into account the actions by bodies such as the Port of London Authority in charging up to £10 per container per day demurrage for containers which were kept there because of the strike, which had nothing to do with those who operated them?

Mr. Rodgers: Yes, I hope that I have taken account of that. Although this will not affect all the road haulage companies, I appreciate that it might in certain circumstances help to determine their future costs. However, despite all the problems, I hope that as large a part of this increase as can be absorbed will be and that the industry will make, as it has been making—I do not want to undervalue it—a valuable contribution to our industrial performance.

Mr. John Ellis: rose—

Mr. Speaker: Mr. Ellis.

Mr. Ellis: No. 25, Sir.

Mr. Speaker: I called the hon. Gentleman to put a supplementary question.

Mr. Ellis: I am one of those hon. Members who do not presume on your courtesy, Mr. Speaker.
Will my right hon. Friend comment on the fact that in region no. 10, based on Hull, a settlement was reached on the first day of the road haulage dispute and that it was only the road hauliers accepting the instructions of their London office to renege on that obligation that cost us anything in that dispute in that area?

Mr. Rodgers: I would not want to comment now on matters which arose in this dispute. I am concerned only that the costs which inevitably fall on the industry are absorbed as far as possible and are not passed on.

Mr. Cryer: Would my hon. Friend care to comment on the continued clamour of the Opposition during the road haulage dispute and the fact that no official spokesman of the Conservatives expressed regret at the death of a picket during the dispute at Aberdeen? Would he comment also on the fact that in recent times the railways have continued to provide a service in spite of adverse weather conditions, and that, yet again, the Opposition, after having made many carping criticisms—

Mr. Speaker: Order. We are on road haulage, I think.

Mr. Cryer: I am just coming to a conclusion, Mr. Speaker. The Opposition have failed to mention that four railway men died trying to maintain those services. It should be recognised that they are working people who try to give a service to the public.

Mr. Rodgers: Yes, there is from time to time a certain lack of generosity, but I understand that in trying circumstances people sometimes fail to say what otherwise they might say. I very much appreciate what my hon. Friend says about what we owe, particularly in weather of the kind that we have been experiencing, to all those who provide a service to us in the House of Commons of a kind that we never have to play any part in providing ourselves.

Mr. Marten: To what extent were the increased charges mentioned in the question, arising out of the increased wage rates, due to the EEC directive cutting down drivers' hours?

Mr. Rodgers: The hon. Gentleman is ingenious, but I give a precise reply to a precise question. The answer is "Not at all".

A6, Leicestershire (Traffic Flows)

Mr. Michael Latham: asked the Secretary of State for Transport when he expects the survey ordered by his Deparment into traffic flows on the A6 road at Mountsorrel and Quorn, Leicestershire, to take place.

Mr. Horam: The survey will be carried out by the Leicestershire county council as the Department's agents. It should take place during the latter part of March and the beginning of April.

Mr. Latham: Will the Minister take it that local people are extremely grateful for this survey, especially since he himself said in the House only last year that there could be no question of a bypass at present? Secondly, will the hon. Gentleman confirm that the Department has a completely open mind on the matter and that it will be substantially guided by the results of the survey?

Mr. Horam: Indeed, we have an open mind on the matter and we shall be guided by the figures which are thrown up by the survey. I must also apologise to the hon. Gentleman that we have not started the minor improvements which I promised him quite as soon as we should have liked.

Road Safety

Mr. Michael McNair-Wilson: asked the Secretary of State for Transport what additional measaures to improve road safety are currently under consideration in his Department.

Mr. Horam: The House will be aware of our initiatives on compulsory seat belt wearing and on motor cycle training. In addition, we are carrying out the necessary preparatory work for new drink and driving legislation. Further measures are under consideration to improve the safety standards of coaches and heavy goods vehicles; and new initiatives are planned on child cycling.

Mr. McNair-Wilson: Since the Minister has referred to motor cycle training, may I remind him that 90 per cent. of all learner motor cyclists do not enter the training scheme? What initiative does he intend to take to encourage young people buying a motor cycle for the first time to use that scheme and thus to improve road safety?

Mr. Horam: As the hon. Gentleman may be aware, we are increasing the facilities available for training for people wishing to ride a motor cycle, and that scheme is going very satisfactorily. In addition, we are advertising much more widely the training facilities which are available. All of this will help. Also, we have just received a report from the standing advisory committee on motor cycle training, and we shall see how we can take further measures to help in this

direction. The figure given by the hon. Gentleman is entirely accurate and is most deplorable.

Mr. Pavitt: Is my hon. Friend taking any further steps to deal with irresponsible motorists on motorways who, at times when the red lights are flashing or when there are patches of fog, still seem to think that they can go along at 70 mph?

Mr. Horam: I think that the police have strong views about that and are making them generally known whenever it happens.

Mr. Jessel: How can the Minister use the word "initiative" to describe the Government's activity on seat belt legislation when in a week from now it will be three years since the House, on a free vote, gave a majority of 100 to that legislation? As every week's delay costs 20 lives, what is the reason for it? Since we all know that both he and his right hon. Friend the Secretary of State want to introduce this legislation, can the hon. Gentleman explain why it is that two persons, the Leader of the House and the Government Chief Whip, are stopping them from doing so?

Mr. Horam: I do not think that the hon. Gentleman is accurate in what he says in the last part of his question. Nevertheless, I recognise his personal concern on this issue over many years. We have had the First Reading of the Road Traffic (Seat Belts) Bill, and I hope that we shall have the Second Reading very shortly.

Humber Ferry

Mr. John Ellis: asked the Secretary of State for Transport when he expects to hold a public inquiry into the proposed closure of the Humber ferry.

Mr. Horam: No formal notice of the proposed date of closure of the Humber ferry has yet been given by Sealink, which operates the service. It would not be for me to hold a public inquiry, but the local transport users' consultative committee may decide to do so.

Mr. Ellis: Does my hon. Friend agree that the opening of the Humber bridge and the possible closure of the ferry will


alter the whole traffic infrastructure—the complicated bus routes and the rest—and that ordinary people have a contribution to make? Therefore, rather than let this matter drag on as the opening date for the bridge goes back and back, will my hon. Friend use his influence to have the inquiry now so that everyone can have his point of view made known? It is possible that there may be a case for retaining a passenger-only ferry. All these matters have to be gone into, but things are dragging on, until one day the bridge will be opened and everyone will say "That is it". It will be very unsatisfactory.

Mr. Speaker: Order. Did not the hon. Gentleman say that he never took advantage of my good nature?

Mr. Horam: In reply to the substance of my hon. Friend's question, it is possible for anyone who uses the ferry to appeal to the transport users' consultative committee to hold a public inquiry when—and if—British Rail indicates that it is finishing the service on the ferry. That allows adequate time for all people in the area to make their points to a public inquiry. I think that that is the right forum. In the meantime, I take note of the points which my hon. Friend has made. Perhaps he should address his remarks to Humberside county council, too, which also has some responsibilities in this matter.

Mr. Brotherton: Does the hon. Gentleman agree that it would be a good idea to keep the ferry going, because it loses very little money indeed, rather than pour money down the drain to the tune of £100 million on this useless bridge?

Mr. Horram: I am glad to see that the hon. Gentleman and my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis) are at last in agreement, though I am not sure whether they will both welcome that.

Mr. McNamara: That is a most unhappy alliance for the House, and one expects that from the south bank of the Humber. Is my hon. Friend aware that there is concern about whether we maintain a passenger ferry when the bridge is opened since, if we have weather such as we have had recently, or high winds, it may well be possible that the bridge cannot be used and an important route

will be needed for taking people from the south bank to places on the north bank?

Mr. Horam: Yes, I take that point, but the inquiry may well decide that a ferry should continue in existence in spite of the building of the bridge. It is perfectly possible that it could so decide.

Bus Services (Revenue Support)

Mr. Ron Lewis: asked the Secretary of State for Transport if he is satisfied with the present level of expenditure on bus revenue support.

Mr. William Rodgers: Revenue support in shire counties is rising broadly as planned, but there are still counties which could do more to maintain and improve bus services. I made this clear in the recent TSG settlement.

Mr. Lewis: Will my right hon. Friend accept that there is now a serious danger that the White Paper proposals for increased spending on rural buses will not be met, and can he confirm that this is so largely because many of the shire counties, which are Tory-dominated, will not take the initiative in this matter?

Mr. Rodgers: My hon. Friend makes an important point, and I have to say that a number of shire counties—especially one or two of them—have a very poor record in support for their buses. As my hon. Friend says, these are Tory councils. I am still hopeful for their redemption, however, because there is a powerful case for improving our public transport everywhere, but particularly in rural areas.

Mr. Farr: Is the Secretary of State aware that the situation is rapidly changing with the escalating cost of fuel, which means that many people living in country areas are virtually cut off from public transport? Will he look at the new picture in a new light today and see what he can do to help?

Mr. Rodgers: I am glad to have the hon. Gentleman's support, because there has been a considerable deterioration in public transport in rural areas over a period of time. We are attempting to remedy this both by the provision for extra spending on public transport and by the Transport Act 1978, which should lead to a substantial improvement in both


conventional and rather less conventional transport in rural areas.

Miss Maynard: Will my right hon. Friend accept from me, as someone who has lived for the greater part of her life in a shire county, that the Tory leopard is most unlikely to change its spots? If the Tory councils do not spend the money which he has allocated, what will he propose to do?

Mr. Rodgers: I understand my hon. Friend's scepticism, and I think that it would be justified in a number of parts of the country. But the truth is that, whereas in 1977–78 about £34 million was being spent on revenue support in shire counties, that figure has since risen to about £45 million; so I think that there is still some hope. If I am wrong and my hon. Friend's scepticism proves justified, we must look at the problem again.

Mr. Moate: Will the right hon. Gentleman accept that, whatever Government schemes are introduced, the local authorities still have to find about 40 per cent. of the total cost of these bus support schemes? If he is right in asserting, as I believe him to be, that what we are concerned with ultimately is service to the public, and not subsidy to the public, and these schemes involve giving less to those areas which have the most inadequate services, is it not more important to relax the licensing system so that one can get improved services in those remote rural areas which at present perhaps have no bus services at all?

Mr. Rodgers: The hon. Gentleman is wrong if he implies that there is a contradiction

between service and subsidy. Without substantial subsidies to public transport, especially in rural areas, there would be no prospect of providing a service. I think that that has been largely accepted. There are still some areas that are trying to provide a service in circumstances where it is uneconomic but where the need is real. That should be remedied within the provision that I have already made under the TSG.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Loyden: On a point of order, Mr. Speaker. On the previous three occasions when transport questions have been taken, questions on the ports have not been reached. There was one such question today but unfortunately the Member who tabled it was not in the Chamber when it was reached. Could you, Mr. Speaker, allocate part of transport questions to the ports? Will you have consultations with a view to allocating 10 minutes or a quarter of an hour of transport questions to the ports, so that we may turn our attention to an important part of the transport system?

Mr. Speaker: The House is aware of the hon. Gentleman's great interest in the ports. We made better progress with questions today by my moving faster and calling fewer supplementary questions, with the result that there are more disappointed hon. Members. [HON. MEMBERS: "Hear, hear."] I know. It is not for me to interfere with the Order Paper in any way. The House would soon resent that.

Oral Answers to Questions — AMBULANCE SERVICE (INDUSTRIAL DISPUTE)

Mr. Patrick Jenkin (by private notice): asked the Secretary of State for Social Services if he will make a statement about the strike by ambulance men in London and elsewhere and if he will state the measures that he is taking to ensure that emergency services are covered.

The Secretary of State for Social Services (Mr. David Ennals): As the House knows, most ambulance authorities have been able to provide only an emergency service for nearly a month as a result of official industrial action over pay. An unofficial group has been urging even tougher action and last week threatened a 24-hour strike for today and a withdrawal of all services.
At an official delegate meeting in London yesterday ambulance men voted by a substantial majority not to withdraw emergency services, though they did decide to continue their action while negotiations over pay proceed. After this decision was known, one of the leaders of the unofficial group announced that the threatened 24-hour strike had been postponed for a week.
Yet, as right hon. and hon. Members will know from radio and television reports, in several areas some ambulance men have ignored the advice of both their union and unofficial leaders and have walked away from their duties. I am sure that the whole House will join me in strongly condemning this reckless and irresponsible action. It will do nothing to help the pay negotiations, which I hope will lead to a very early settlement.
In London and Manchester this unofficial action has meant that, even with the support of police and voluntary organisations, the emergency service could not be maintained. Accordingly I have given authority for Service ambulances to provide assistance, and I shall do so in any area where this situation arises. I also authorised the use of Service ambulances in Somerset, but further volunteer ambulances became available and the Service ambulances have not so far been used. In Liverpool, where unofficial action has also taken place, I understand that so far the ambulance

authority is managing with police and voluntary support.
The Whitley Council management side put a new offer to the ambulance men's negotiators on Wednesday of last week. This has been discussed by the staff side of the council and more widely with shop stewards. The Whitley Council meets tomorrow to discuss this offer and any other proposals. Today's unofficial action would be irresponsible at any time, but when an offer is on the table and is being negotiated it is utterly pointless.

Mr. Jenkin: Does the right hon. Gentleman accept that the Opposition regard the unofficial action as immensely damaging to the ambulance service and totally pointless and futile? Will he join with us in paying tribute to the ambulance men and ambulance officers who not only during today's strike but over the past four or five weeks have, under immense difficulties, managed to maintain some sort of ambulance service? Will he now give the undertaking for which I asked two weeks ago, to do his utmost to ensure that not one of those men will suffer any reprisals or victimisation when the dispute is over? In particular, will he give the House an undertaking that none of them will lose his job as a result of his loyalty to the service?
Will the right hon. Gentleman confirm that nearly half the ambulance men are now earning over £90 a week?

Mrs. Dunwoody: No.

Mr. Jenkin: That is the official figure that I have had from the DHSS. I have been told that 46 per cent. of ambulance men are earning over £90 a week, with average overtime of 8·1 hours a week.
Is the right hon. Gentleman aware that there is not one member of the ambulance service who has the slightest idea of what the management offer made last Wednesday will mean in his own pay packet? Is it not a gross failure of communications that none of those concerned, whether taking strike action or not, can form any view of what the 9 per cent. offer will mean to them? Does the right hon. Gentleman recognise that over the past five weeks there have been an average of 200 ambulance men per weekday in London sitting doing nothing and receiving full pay while doing so?

Mrs. Dunwoody: Day coach men only.

Mr. Jenkin: Does the right hon. Gentleman accept that that is the totally damaging consequence of his misguided and misconceived circular that he sent out at the beginning of the dispute? When is he going to cease being "the soft touch" that the Daily Mirror accused him of being yesterday?

Mr. Ennals: I shall cool down before I reply to the provocative nature of the right hon. Gentleman's questions. I shall try to deal coolly with difficult issues. First, I see no possible justification for those who have unofficially taken action designed to leave the population without emergency cover in times of accidents or serious illness. I do not need to join with the right hon. Gentleman, as that is what I have said myself.
Secondly, I pay tribute to the ambulance service for the work that it has done over many years. It is only in the past few weeks that we have concentrated upon the service provided by the ambulance men. We have failed to recognise that it is a service that has provided magnificent benefit for the public, night and day, in difficult circumstances.
When the dispute is settled—I hope that it will be settled very soon on the basis of the negotiations now taking place—I hope that there will be no bitterness. I hope that there will be no recriminations, no reprisals and no sackings. It is important that the morale of the service, which inevitably has suffered through industrial disputes and unofficial action that leads to disputation and bitterness between those acting officially and those acting unofficially, is not damaged. I hope that we shall not have any such problems.
The average gross pay for ambulance men is about £86 a week. That includes overtime work, shift duties, night duties and weekend work. These men often work unsocial hours to provide not merely an emergency service but a full service for the population. The manner in which the right hon. Gentleman referred to ambulance men will do no good either to negotiations or to ending the dispute. We should not talk in those terms.
The right hon. Gentleman said that many in the ambulance service did not

know the nature of the offer that had been made on Wednesday. I think that that is true. It is a matter for the unions to decide. It is a matter of negotiation. The offers made were made as between the management side and the staff side of the Whitley Council. The staff side took the offers away to consult with its own members. It returned with some points. We shall see what proposals will be put forward tomorrow.
In his final question the right hon. Gentleman made some disparaging remarks about circulars that I sent to the health authorities. The position is clear. How they fulfil their duties and the decisions that they take in relation to management are the responsibility of the health and ambulance authorities; it is not for the Secretary of State to try to control the service from the centre. The idea that we should breathe down the necks of health authorities and tell management how it should do its job is one that I do not accept.

Mr. Spriggs: I thank my right hon. Friend for his statement. He has done justice this afternoon by commending the ambulance service to the House. May I point out to him that those of us who have been at the receiving end of the ambulance service can do nothing but commend the service to the nation?

Mr. Ennals: I appreciate what my hon. Friend said. He speaks for all my right hon. and hon. Friends in paying tribute to the work done by ambulance men the year round.

Mr. Body: Does the right hon. Gentleman consider that management has some responsibility in communicating the offer to the ambulance men?

Mr. Ennals: I honestly do not think so. We must look at this matter. There are problems. The staff side of the Whitley Council has had proposals put to it which it has taken away to consider. Those involved did not say that they had accepted those proposals. They have come forward with other suggestions which have been considered by the management side. The management side will put forward tomorrow what I have little doubt will be a final offer.
I understand the position of the unions. They do not want to start a general consultation of their members until they have


reached the important position—which I hope they will reach tomorrow-of commending what has been negotiated for acceptance by their members. I hope that they will do that.

Mr. Pavitt: Will my right hon. Friend confirm that the leadership of the unions involved has made every effort and done a magnificent job in trying to contain unofficial strikes? Does not this show that, instead of the Tories trying constantly to weaken and undermine the unions and the media constantly attacking them, we should strengthen the organisation of the unions? In the longer term, is not a revision of the whole of the Whitley Council machinery within the National Health Service overdue?

Mr. Ennals: On the second question, the important report that was produced by Lord McCarthy was carefully studied. It led to considerable changes. It may very well be that other changes may be proposed. Certainly the Government are ready to look at them. We have already had a careful look at the way in which the Whitley Council system works. Basically it works well.
As to the first part of the question, dealing with the leadership of the unions in this case, I deeply regretted that the unions decided to embark upon this industrial action at all. I must say that at the beginning. I regret that they did so. However, they sought to contain it. Both the ambulance and health unions sought to ensure that emergency services were provided and have intervened on many occasions to ensure that their codes of conduct were respected. To that extent I pay tribute to them.

Sir Derek Walker-Smith: Will the right hon. Gentleman say what is the financial position in respect of individuals who withdraw their services in such circumstances as he explained? Do the contracts of employment provide for non-payment for the period in question?

Mr. Ennals: Those who are on strike receive no pay during the period of their strike.

Mr. Arthur Lewis: Does the Minister agree that it ill behoves those who know that company directors receive hundreds of pounds per week extra in their salary—one was reported last week as

receiving £1,000 per week extra—to criticise ambulance workers receiving £90 per week? Is the Minister aware that ambulance workers, rightly I think, claim that as they have always been allied to the life-saving services, such as the police and the firemen, they should be treated like them? In view of the fact that the police are now helping out, why should we not pay the ambulance men the same as the police and firemen—as was always the case?

Mr. Ennals: My hon. Friend knows that the second half of the proposal that was made, apart from an offer of 9 per cent. from the beginning of the settlement date, was that an independent inquiry should be established into the pay of ambulance men as well as others within this group—local government and Health Service ancillary workers and manual workers in the universities. That is an important task. The inquiry will make a number of comparisons. I have little doubt that it will consider the position of those workers in relation to the police, firemen and others. However, it must be recognised that only 10 per cent. of the time and duties of ambulance men is spent dealing with emergencies. The rest is spent dealing with non-emergencies. Therefore, that emergency 10 per cent. is an important part of their task. There is no doubt that part of the purpose of comparability is to have a look at the basis of pay and conditions compared with others in comparable sectors of employment.

Several Hon. Members: rose—

Mr. Speaker: Order. This is an extension of Question Time. I propose to call three more speakers from each side.

Mr. Stephen Ross: Is the Minister aware that we welcome his condemnation of the unofficial strikes in London, Liverpool and elsewhere? Is he further aware that averages may be misleading? The figures that the Minister quoted are nothing like those which refer to ambulance men in the rural areas. Are the deliberations being deliberately delayed so as to arrive at a settlement of the local government dispute before the Health Service dispute is settled?

Mr. Ennals: No. Formal offers will have been presented today by the local authorities. But tomorrow formal offers


will be made in the cases of the ambulance men and the National Health Service workers. It was concluded that it would be best, as has been the tradition, to look at these matters collectively. Therefore we hope that the offers that have been made this week will be accepted and form the basis of a final settlement.

Mr. Skinner: Will the Minister confirm that recent figures—despite the so-called figures that have been bandied about by moonlighting Members of Parliament and others—are not sufficient to keep ambulance men in the jobs and that many ambulance men are leaving? As to the question of communications, will the Minister take on board the fact that it is not so much that the ambulance men do not know what is the pay offer but more a question of their not liking what they see?

Mr. Ennals: We must see what happens. The final offer will be made tomorrow. I hope that the unions which have been actively involved in consultation will accept these proposals and commend them to their members. The unions are fully aware that the Government, in their offer, have taken considerable note of the need to give something extra for low-paid workers and that we have equally recognised that we have a responsibility for those who work in the public sector. The nature of their work should be properly compared with that of those who work in the private sector. This is why there is enormous merit in the decision that has been taken to establish the independent Standing Commission to involve itself in comparability studies, especially as they affect this group—and, I hope, later, the nurses and others.

Mr. Lawrence: Is the Secretary of State aware that he has been angering ambulance men for quite a long time, because he has repeatedly set his face against treating them as one of the emergency services? Does he realise that he should deal with that factor at this stage of the dispute?

Mr. Ennals: These matters are being dealt with through the Whitley Council. It is not for me to start making decisions on what should be the position of ambulance men in relation to others. This is precisely the purpose of a comparability

study. It may well be that from that study conclusions will be drawn which are beneficial for the ambulance men. I do not know. The investigation will be independent. That is the right way in which to proceed rather than that the Secretary of State should seek to reach conclusions. After all, I am not the employer.

Mr. Molloy: Is my right hon. Friend aware that what has been said from the Opposition Front Bench is patently not true? The four general secretaries of the unions involved have instructed their members that the stage of negotiations so far is, they believe, a basis for an ultimate solution over a number of months. This information in detail has been sent to every branch of the Confederation of Health Service Employees throughout the country. When the right hon. Member for Wanstead and Woodford (Mr. Jenkin) makes his absurd statements he is not helping the cause at all. Indeed, I have to say with some reluctance, concerning people who are ignoring the recommendations of their leaders in the health unions and are causing unofficial strikes—[Interruption.]—that he is also making a contribution to this by being—

Mr. Speaker: Order.

Mr. Ennals: My hon. Friend speaks with authority—[Interruption.] Oh, yes, he does, particularly with his very close connection with COHSE. I am very grateful to him for what he said.

Mr. John Hunt: Will the right hon. Gentleman convey to the striking ambulance men that any public sympathy for their pay claim will very quickly evaporate in the wake of today's wholly irresponsible action, which he has rightly condemned? The right hon. Gentleman referred to earnings of £86 a week. Will he say how that compares with the weekly pay of the Service men who are today coping with the emergency calls?

Mr. Ennals: I will not go into questions of comparability. It is not for me to do that. I should not need to repeat what I have said, that this sort of unofficial action, not only against the advice of union leaders but against a vote taken at a properly constituted meeting yesterday, can do no good at all to the claim that the men have put forward.

Mrs. Dunwoody: Is my right hon. Friend aware that the normal part of the accident coverage is provided by men who work almost compulsory overtime? Should he not ask himself why there are such bad labour relations inside this essential service? Will he please make sure that he sets up an inspectorate to look at the conditions of ambulance men in the same way as the conditions of the police services are examined?

Mr. Ennals: No, I will not set up an inspectorate. I have a good deal of confidence in the health authorities and the way in which they fulfil their provision of ambulance services. The study of comparability will be the task of the independent commission.

Oral Answers to Questions — LYTHAM HOSPITAL (CLOSURE)

Mr. Edward Gardner: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
 the indefinite closure of Lytham hospital, in my constituency, because of a shortage of nurses.
The closing of a hospital such as Lytham hospital is something more than a matter of local distress and concern. It is another significant and alarming sign of the move by the Health Service towards a breakdown. A growing number of nurses are becoming exhausted by the strains imposed by the present industrial dispute. I am concerned—as, indeed, are my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell), my hon. Friend the Member for Blackpool, South (Mr. Blaker) and my hon. Friend the Member for North Fylde (Mr. Clegg)—at the growing number of nurses who are having to give up their work because of sickness.
Last week, 16 per cent. of the nurses in the area had to go off work because of sickness. I am told that today the number of nurses available for duty has been reduced by 18 per cent. Nurses in the area—and, indeed, throughout the country—are being asked to shoulder—

Mr. Speaker: Order. The hon. and learned Member for South Fylde (Mr. Gardner) will not, I know, seek to make now the speech that he would make if I were to grant the application.

Mr. Gardner: I was trying to put before you, Mr. Speaker, arguments upon which I rely in seeking to persuade you of the urgency of this matter.
One of the vital points that I seek to make is that the number of sick nurses is growing. That is a fact, and we have to face it. I was merely giving figures. I do not intend to go beyond that except, by your leave, Mr. Speaker, to say that these nurses have been working 12 or more hours a day, they have been giving up their free days, and they have been helping with work which they were never intended to do. They have been doing everything that good will, compassion and personal sacrifice can achieve to make


sure that their patients are properly cared for.
Other hospitals in the area are suffering such a shortage of nurses, because of illness, that urgent operations cannot take place. [Interruption.] I hope that I may have your indulgence, Mr. Speaker, to say, finally, that in one of these hospitals an old-age pensioner of 78 years had his operation cancelled two days ago. He is reported to have cried out "For God's sake, they should help me, I'm in agony." Nobody could help him, and today he is still awaiting relief.
With examples of that kind before us, Mr. Speaker, and the present state of the Health Service, I submit that this is a matter for urgent debate.

Mr. Speaker: The hon. and learned Member gave me notice before 12 o'clock this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely,
 the indefinite closure of Lytham hospital because of a shortage of nurses.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I listened with great care to what the hon. and learned Gentleman had to say, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Oral Answers to Questions — AMBULANCE SERVICE (LONDON)

Mr. Geoffrey Finsberg: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
 the problems of the London ambulance service.

Although we have had a private notice question, I do not believe that the House has had the opportunity of a proper discussion of the matter. It is urgent because it is happening today. Londoners are at risk, in spite of the aid coming from the police, the voluntary services and the Armed Services. The matter is specific because it relates to one service, and there is no other way of getting swift help from the National Health Service. It is important, because lives are at stake.
The House needs the opportunity to expose the so-called concordat. Those on strike have ignored union instructions and ignored majority decisions. This proves that, despite the so-called concordat, neither the Government nor the Trades Union Congress can deliver anything they promise.
For these reasons, Mr. Speaker, I submit that the matter should have urgent consideration.

Mr. Speaker: The hon. Member for Hampstead (Mr. Finsberg) gave me notice before 12 o'clock this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
 the problems of the London ambulance service.
The House knows that I am not expected to give reasons for the decision that I reach in such applications. I listened to the earlier exchanges which took place and I listened with very serious care to the hon. Gentleman. However, I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 9 MARCH

Members successful in the ballot were:

Mr. Frank Allaun
Mr. Peter Tapsell
Sir George Young

Oral Answers to Questions — COAL MINING (SUBSIDENCE)

4 p.m.

Mr. Jack Ashley: I beg to move,
That leave be given to bring in a Bill to amend the Coal-Mining (Subsidence) Act 1957; to establish an independent commission to take over certain responsibilities from the National Coal Board; and for connected purposes.
Families in every coal mining area in Britain know of the terrible damage that can be caused by coal mining subsidence. When coal mine workings subside, the foundations of houses slowly and irrevocably disintegrate. Some occupants have been compelled to watch the foundations and the floors of their houses literally fall to pieces. They have seen the walls of their houses crack, gaping holes appear in the ceilings, and the roofs open to the elements. Some houses have been literally destroyed by subsidence and have fallen to pieces.
Damage is generally less devastating than that, but for many families damage of any kind to their property is a serious and expensive business, unless it is paid for by those responsible. I believe that those families whose homes are damaged by subsidence should have a right, first, to an early and independent assessment of liability; secondly, to repairs which make good all the damage; thirdly, to payment for loss of any value due to subsidence, and, fourthly, to compensation for consequential loss, such as undue stress and loss of earnings.
The 1957 Act has served the community for 21 years, and the subsequent code of practice has been brought up to date, but I believe that the Act needs radical revision. At present the National Coal Board decides in the first instance whether it is liable. It has the surveyors and expertise, and it tells the householder what its decision is. If the Board says that it is not liable, the small householder is really in a fix. I believe that he is helpless. He has to pay for a surveyor and a solicitor in order to take the Board to the county court or the Lands Tribunal.
Under the code of practice, the National Coal Board says that it will not pay for, but will contribute to, surveyor's fees. It says that it will consider a contribution to the cost of legal advice. It does not

say that it will give the money, but merely that it will consider it. If the National Coal Board decides that it will not pay a contribution, the householder must pay for the legal advice.
There is absolutely no provision in the Act for the Board ever to consider paying for legal representation—and that is where the cost arises—when lawyers represent an individual in court or at the Lands Tribunal. In such cases the householder must decide whether he will take this vast and powerful organisation to court. The householder knows that if he loses he will have to pay tremendous costs, which is a daunting prospect.
Should the householder win his case in court, the Board is merely under an obligation to make the house reasonably fit. What constitutes "reasonably fit"? I think that that phrase is as open to as many interpretations as there are area directors of the National Coal Board.
What would happen if an hon. Member had his car bashed in in the courtyard outside the House, and the person who damaged the car told him that he would make his car "reasonably fit"? Imagine the reaction of the hon. Member to that kind of response. But that is the response that the householder gets when his house is damaged by the National Coal Board—that it will make the house "reasonably fit".
I believe that we should impose a statutory obligation on the Board to restore a house to its former standard—after all, the Board caused the damage—where liability is clearly established.
Even when the Board has made a house what it calls "reasonably fit", the house can still lose value, because people are afraid that further subsidence will occur later. What happens then? The Board should be under an obligation to pay the difference between the sale price of the house and its market value before it was damaged. What the Board does at present is to say that it will consider whether to make this payment where a family has to move. It stresses the words "where a family has to move"—meaning in circumstances such as when a man must change his job.
What about a family who want to move, such as a family living in a small terraced house who want a better house for the children? The Board should not


simply have to consider that kind of payment. There should be a legislative requirement for it to pay for loss of value. I also believe that the Board should pay for inconvenience and similar losses, such as stress to the householder and loss of earnings due to time off work.
The Act should be amended so that an independent Government commission could be set up to take over some of the powers of the Board and to deal with these problems. That commission should be responsible for deciding, in the first instance, whether the Board is liable for the subsidence. The commission should act on the existing legislative presumption that the Board is liable until it is proven not to be so.
Should the householder or the Board disagree with the commission, either would have the right to appeal to the courts or to the Lands Tribunal. The commission would also be responsible for carrying out proper repairs without necessary delay to enable the house to be restored to its former standard. It would provide for the householder to receive the full value on the sale of the house which had been damaged by subsidence, and it would assess other consequential losses, such as loss of earnings. Under the Bill, that independent commission would be empowered to evaluate such

matters and to impose the necessary charges on the Board. I should like to add that the activities of the commission should be subject to investigation by the Parliamentary Commissioner.
In short, my Bill would help to assist the householder who gets that sinking feeling when he sees his house falling as a result of subsidence. It would help to redress the balance of power between the National Coal Board and the individual, so as to make them more even matched than they are under existing legislation.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jack Ashley, Mr. Joseph Ashton, Mr. Stanley Cohen, Mr. Allen McKay, Mr. George Rodgers, Mr. Dennis Skinner and Mr. Edwin Wainwright.

Oral Answers to Questions — COAL MINING (SUBSIDENCE)

Mr. Jack Ashley: accordingly presented a Bill to amend the Coalmining (Subsidence) Act 1957; to establish an independent commission to take over certain responsibilities from the National Coal Board; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 94.]

Oral Answers to Questions — NORTHERN IRELAND (RATES)

4.12 p.m.

The Under-Secretary of State for Northern Ireland (Mr. Tom Pendry): I beg to move,
That the draft Rates Amendment (Northern Ireland) Order 1979, which was laid before this House on 7 February, be approved.
This order has two main objects—to ease the rates burden on property used for sport, physical recreation or for community purposes, and to provide rate relief for facilities for the disabled. The order would amend the Rates (Northern Ireland) Order 1977, which is the principal order relating to rating in Northern Ireland. It also proposes minor modifications to valuation procedures not directly connected to these main provisions.
I believe that right hon. and hon. Members will be interested in the background to this legislation. The proposals about rating relief for physical and community recreation arise from the report of a committee, under the chairmanship of Professor R. J. Lawrence of Queen's university, Belfast, which was appointed in September 1976,
 to consider the rate liability of bodies providing facilities for sport, recreation and community activities for the public, or a substantial section of it, and in doing so take account of the practice in comparable fields in Great Britain ".
The committee consulted widely with interested organisations. It studied in detail evidence submitted orally and in writing from bodies concerned particularly with the easement of the rates burden on their members. It also gave great weight to the well-considered and expert evidence submitted by the Association of Local Authorities, and, indeed, the proposals made by that body became the cornerstone of the recommendations made by the committee. Having also given detailed consideration to the position in Great Britain, the committee produced a report with which, subject to some reservations, the Government were in agreement. The report was issued for public consideration, and in the main public comment was favourable.
The report stressed the importance of sporting and recreational facilities being available in Northern Ireland. It recommended that organisations providing such

facilities should be encouraged by widening the scope of rate relief and raising its level. The report also said, however, that only those portions of a hereditament that are actually used for the purposes of sport or physical recreation should qualify for relief, and that all other portions, whether bars, restaurants, card rooms and so on, should be fully rated. The report further stressed that rigorous conditions were necessary to prevent abuse and to safeguard the interests of the general body of ratepayers. The Government endorsed this approach.
A proposal for a draft order was prepared and published for consideration. I read all the comments submitted in writing and listened carefully to oral rep-representations made to me. The district councils have also been consulted both individually and through the Association of Local Authorities, and have indicated that they are satisfied that the draft order covers the points made by them to the Lawrence committee, and in particular concentrates relief on helping the sporting aspects of clubs while protecting the general body of ratepayers. In finalising the draft order now before the House, I have endeavoured to meet as far as possible the points put to me.
Article 3 of the draft order provides for the existing level of 35 per cent. rate relief, which currently applies to the total net annual value of certain sporting hereditaments, to be increased to 65 per cent. This increased relief will in general be restricted to the portion of the hereditament which is used solely for the purposes of a prescribed recreation. This means that, in particular, the bar or restaurant in a club will not qualify for rate relief, but this is reasonable as such facilities themselves provide an income for the organisation. It also means that those sporting bodies which obtain little or no supportive income from such facilities would benefit to a greater extent than at present.
The proposals are broadly in line with the position in Great Britain, where local authorities as rating authorities have, and freely exercise, a discretion in granting corresponding relief. Such relief is on average generally in the region of 50 per cent., and the Lawrence committee thought—and the Government agree—that, overall, Northern Ireland should be given something similar. We believe that


65 per cent. is the correct figure. This takes, into account not only the restriction of relief to the recreational portions of the hereditament but also the need to encourage in Northern Ireland those voluntary clubs and activities which offer opportunities for constructive social effort, particularly in areas of social deprivation.
In line with the recommendations of the Lawrence report, rating relief under the order will be restricted to voluntary bodies which do not employ persons who play for reward other than as a coach or instructor. As the House knows, the Department of Education in Northern Ireland provides aid to professional football clubs under a grant scheme which is more appropriate than rate relief. Organisations which have less than 20 per cent. of their valuations apportioned to solely recreational use will receive no relief, while those of 80 per cent. and more will receive relief on their full net annual value. So as to provide a smooth progression of the level of relief up to 100 per cent., relief for hereditaments which are treated as 50 per cent. or more recreational will be scaled. Relief is thereby weighted in favour of hereditaments which are predominantly recreational, and this weighting will compensate for possible marginal exclusions under the necessarily strict conditions regarding use solely for a prescribed recreation.

Mr. J. Enoch Powell: The Minister referred to a smooth graduation being provided for by the provisions of article 3 Is it not the case that, for example, there is a jump from 49 per cent. to 71 per cent. in the derating at one point in the scale, and similar jumps of roughly 20 per cent. at higher points? Is it really true to say that the graduation is smooth?

Mr. Pendry: I do not believe that the right hon. Gentleman has got it right. I should like to give him some examples of how this is progressive and smooth, and I shall do so later.
I have considered with particular care the words "used solely" in defining those areas which would be regarded as recreational and would qualify for relief. It has been put to me that this term was much too restrictive, and that it would exclude from relief rooms which while used for the sporting activities of a club might

also on some occasions be used for non-recreational activities—for example, a weekly dance in a room which was otherwise used only for sport.
I think, however, that if we are to achieve the aims which the Lawrence committee recommended so strongly—and I remind hon. Members that these were that help by means of rate relief should be directed towards sporting activities of a club and not the social side, and that there should be strict control of relief to protect the general body of ratepayers—it is essential to have very clear lines between what portion of a club's premises is sporting and what portion is not.
It would be impracticable to have a grey area here, because the circumstances could differ so widely between clubs, and varying interpretation could be quite unfair to clubs and to the ratepayers. I should also say again that the 20 per cent. addition, where a club's sporting apportionment is above 50 per cent., and it is therefore mainly sporting, is intended to take into account very small areas about which there may be doubt whether they qualify.
I was particularly impressed by the arguments put to me on this problem at a meeting with members of the Sports Council for Northern Ireland. I have a high regard for the views of this body and noted its concern. While, as I explained to it, I think it necessary to retain the use of the word "solely", I would wish to be certain that the order did in the event achieve what both the Lawrence committee and the Government had in mind. I therefore intend that the Department of Finance shall review the matter in 1981 at the end of a two-year running in period. It will look carefully at what the effect of the order has been in clubs, because the proof of the pudding is in the eating.
Such a review will show whether any of the disadvantages that some now fear have in fact come about. In carrying out the review, the Sports Council and local authorities will be looked to for advice and guidance. That is the fairest way to deal with the problems that were presented to me by such bodies as the Sports Council.
I have also decided, in view of the representation made to me by various


bodies during the consultation period on the proposals for the draft order, that it is necessary to introduce special provision to allow relief on car park spaces used by participants in sports although they may also at times be used by non-participants. Similarly, I have decided that the order as first drafted was too restrictive when applied to certain portions of hereditaments constructed or adapted for special use, such as the bathrooms or changing rooms and stores. The order has been redrafted accordingly at article 3(1).
I have also given careful thought to representations made to me that some clubs may, under this draft order, be worse off than at present. Any such clubs would be predominantly social rather than sporting. Whilst I think that their number will be small—smaller than perhaps is anticipated by those who have fears about this—in order to be as helpful as possible I have decided to assist any organisation affected in this way. Therefore, the order has been amended during the consultation period to help clubs in this position.
There will be a transition period of two years, during which clubs will pay in each of those two years respectively only one-third and two-thirds of the increased amount in their new rates. This means, for example, that where a club's rates would be £100 more in 1979–80 under this order than under current legislation, they will pay only an increase of £33. In 1980–81 that increase will be only £66, and not until 1981–82 will they be called upon to pay the full increase to which they are liable.

Mr. James Kilfedder: Does the hon. Gentleman agree that, despite the amendments about which he has informed the House, most recreational clubs in Northern Ireland still feel strongly about the restrictive quality of the word "solely"? Will he consider changing that to "mainly"? We are all anxious to ensure that these recreational clubs should survive economically and provide leisure facilities, particularly for young people.

Mr. Pendry: I understand the hon. Gentleman's concern. We believe that we have it right, but, in order to be sure, the fairest way would be to have this two-year running-in period, so that we can

see where we are going. The object of the order is to help sporting clubs. At the end of that period we shall be in a better position to know whether we have struck the right chord. We could be wrong; that is why we are building this into the order.
I have thus tried to be fair to those who will have to adjust to this new legislation, which rightly weights rating relief in favour of organisations which are predominantly recreational.
The Government recognise the important contribution which physical activity makes to mental and physical well-being. They therefore endorsed the Lawrence report's recommendation that in order to qualify for relief a hereditament must be used for sports, whether indoor or outdoor, which demand an appreciable degree of physical effort. A list of such sports will be set out In an order made by the Department of Finance for Northern Ireland after consultation with the Association of Local Authorities for Northern Ireland and the Sports Council for Northern Ireland, through whom the interests of other sporting bodies, in particular the Northern Ireland Council of Physical Recreation, would be channelled. Under current constitutional arrangement Under current constitutional arrangements, such an order will be subject to annulment by Parliament.
In addition to rate relief for sporting bodies, Professor Lawrence's committee also looked into that for bodies concerned with community activities for the public. The report of the committee stressed the shortage of premises available in Northern Ireland for community activities and it recognised that this could not be remedied quickly. It therefore sought ways to encourage the use of existing halls which belong to a variety of organisations and which are to be found all over Northern Ireland.
The committee recommended a widening of the scope of current rate relief for such halls. Therefore, article 4 of this order provides for the extension of rate relief to hereditaments used for purposes regarded as charitable under the Recreational Charities Act (Northern Ireland) 1958. This relief will be granted provided that, first, the occupying organisation is not established or conducted for profit, secondly, the premises are used for qualifying purposes for at least 10 per cent.


of the time in a year, and, thirdly, any charge for the use of the premises is restricted to the amount necessary to defray only reasonable expenses such as heat and light. An important clarification which I have introduced into the draft order is that neither the occupier nor the user is required to be a charity in order to qualify for rate relief. He has only to use the premises for recreational charitable purposes.
This article is specifically designed to encourage owners of halls to allow other bodies to use their premises for the public good. It deviates from the standard rule of rating law that a body can obtain rate relief only where its functions qualify. It should—and I hope it will—by making it possible to reduce their rate bill, provide a strong incentive to voluntary bodies occupying suitable premises to allow others to use their halls for community purposes. This is an important aim and one I am keen to see succeed. It will thus increase the stock of accommodation available for the public use and benefit.

Rev. Ian Paisley: The Minister's comments will be widely welcomed in Northern Ireland. We have a number of halls that could be used in that way, but many of these halls are used for religious activities. Would that come under the general term of a charitable activity, in the same way as Sunday schools and harvest thanksgiving services?

Mr. Pendry: No, but I should like to consider some of the functions that flow from a religious organisation in such a hall, and I shall reply to the hon. Gentleman.
The Government attach importance to this matter, and in particular recognise that their rates bill is a major impediment to the continued existence of small halls in rural areas. I therefore sought a special method of providing rates relief for those halls which might otherwise find difficulty in attaining the qualifying percentage use. I recognised that their rural location and the sparsity of population in their area might give them only a limited opportunity to use or offer their premises for community purposes. Such special difficulties, in my opinion, justify a special solution. I have therefore provided that

the criteria for qualification will be linked to potential use in addition to actual use, thus taking account of any special difficulties in scattered rural communities. I trust that this will be seen as a real effort by the Government in giving them an added incentive to allow their halls to be used as widely as possible by the local community.
I now come to the provisions of rate relief for disabled persons, which I am sure will have the wholehearted support of the House. The rate relief currently available to disabled persons in Northern Ireland is limited to accommodation for a disabled person's vehicle. This order will extend to disabled persons in Northern Ireland the easement in their rate burden provided for the disabled in England, Wales and Scotland in the Rating (Disabled Persons) Act 1978, which becomes operative on 1 April this year.
Article 5 provides that the burden of rates will be lifted from those domestic facilities which are specifically required for meeting the needs of a disabled person who lives there, whether or not he is the owner or tenant of the house. It also covers a garage or parking place completely separate from his home used by a disabled person for keeping his vehicle. In short, this article provides, as I think eminently justified and desirable, that any domestic facilities specifically for meeting the needs of and used by a disabled person are free of rates.
The Rating (Disabled Persons) Act 1978 provides that in England and Wales set amounts of rebate will be given for special facilities regardless of the valuation of the hereditament. In Scotland, however, relief will be based on the valuation of the special facilities concerned. The order follows the Scottish procedure, which I consider to be more suitable to Northern Ireland and which has the support of the Northern Ireland Committee for the Handicapped, which co-ordinates the views of those bodies concerned with disabled persons in Northern Ireland.
Article 6 provides for the exemption from rates of hereditaments used by institutions for the provision of care and after-care, training, welfare services and special employment for disabled persons.
Article 7 provides for the clarification in Northern Ireland terms of "disabled


person" and "illness", and links the former to the recently enacted Chronically Sick and Disabled Persons (Northern Ireland) Act 1978.
Articles 8, 9 and 10 provide for minor consequential and other amendments.
The provisions covered in articles 3 and 4 are estimated to cost about £60,000 in 1979–80. The cost of rate relief for disabled persons, as set out in articles 5 and 6, is most difficult to estimate but can be regarded as insignificant in terms of rate revenue.
The provisions of this draft order will direct rate relief to areas where, I think right hon. and hon. Members will agree, it ought to be given and where it is really needed.

Mr. Powell: I am sorry to interrupt the hon. Member, but I fear that he may be on his peroration. He has not yet fulfilled his promise to me to explain article 3 more fully in order to eliminate my apprehension of a jump from 49 per cent. to 71 per cent. Perhaps this would be an appropriate moment for me to interrupt him.

Mr. Pendry: I thought that when I replied to the debate I would give the right hon. Member more details. I would prefer to do that, because I am sure that I can cover the point that he is making. This is the one area in which we must get information over to as many people as possible, and it is my Department's intention to see that that is done. This could be considered a complicated stepping-stone operation, but it is intended to assist.
With those words, I commend the order to the House.

4.33 p.m.

Mr. Airey Neave: We feel that Professor Lawrence and his colleagues on the committee are to be warmly congratulated on their concise and clear report. It was obviously very useful to the Government in coming to the decisions that they have announced. I should like to thank the Under-Secretary of State for the clear way in which he presented the order, with which we agree.
I was glad that the Under-Secretary listened to the Northern Ireland Sports Council, because obviously it raised important points.
This order certainly improves the position of the disabled and it is to be warmly welcomed by Members on both sides of the House and throughout the Province. The Under-Secretary pointed out that at present the rate relief is quite inadequate. It is available only for premises which house the chairs and the vehicles that the disabled use. Under this order Northern Ireland will be brought broadly into line with the rest of the United Kingdom where the Rating (Disabled Persons) Act applies.
I was glad to hear the definition of a disabled person. In this case it means a person to whom section 1 of the Chronically Sick and Disabled Persons (Northern Ireland) Act 1978 applies. It is Northern Ireland legislation and not Great Britain legislation, and that is quite right.
There is no fundamental conflict between this order and our views. We favour the principle of rate remission in relation to recreation and the disabled and we would certainly encourage local authorities to use the powers that are available in these areas. At the same time, we recognise that final decisions should be taken locally to suit local needs, which means that local authorities should retain their discretionary powers. This is why the order will not put Northern Ireland on exactly the same basis as the rest of the United Kingdom. I do not think that it would be possible to achieve a common standard in the existing circumstances, because in Great Britain elected institutions, subject only to very general conditions, are permitted to grant or refuse rate relief as they think fit. This is clearly explained in the Lawrence report.
The fact that the duty of collecting rates in Northern Ireland is in the hands of a Government Department highlights once again the lack of effective democratic scrutiny of regional administration in the Province and underlines the need for an elected regional authority if a system of devolved government cannot be fully agreed. On the other hand, the large element of flexibility permitted in Great Britain through local authorities cannot be introduced through this measure because of the absence of elected rating authorities. The district councils have, of course, certain discretion in fixing rates.
The Under-Secretary dealt fully with the question of recreation. I welcome his proposals. Whether they go far enough I do not know, and no doubt right hon. and hon. Members representing Northern Ireland seats will wish to comment on this matter. It is right that it should be reviewed after two years, in 1981, and the reduced amounts which the hon. Gentleman suggested should be paid will be welcome. There is considerable feeling about this. No doubt the Under-Secretary will tell us when he replies whether this matter has been fully resolved to the satisfaction of the Sports Council and whether its members are fully satisfied, for example, on the question of committee rooms and whether they are covered by the proposed amendments.
It is clear that to include only those portions of a hereditament being used for recreation is too strict and that the Under-Secretary has in mind a more flexible attitude. We certainly welcome that. I have had an opportunity to read a letter that the Under-Secretary wrote to the hon. Member for Antrim, North (Rev. Ian Paisley), and I agree that there has been a considerable improvement in the Government's attitude. I raise the question of the management of clubs. Certain rooms are vital to that, and committee rooms would seem to be a case in point. I hope that the Under-Secretary will look at that.
The various social activities conducted on club premises—for example, fund raising, without which the clubs would collapse—are essential to the survival of those premises. I do not think it was the intention of the Lawrence committee that relief should be so narrowly circumscribed Perhaps the Under-Secretary could tell us a bit more about that.
On the question of cultural activities, the Lawrence committee saw no need for any change, but its members formed the impression that the existing provision for rate relief for cultural activities is not generally known. The committee recommended that increased publicity should be given by the Government to this aspect of rating law. Are the Government taking appropriate steps to ensure that the provisions for rating relief for cultural activities are more widely known?
The Under-Secretary mentioned charities and charitable organisations. Strictly

speaking, these were not within the terms of reference of the Lawrence committee, but in paragraph 54 of its report it criticised the existing procedures for registration of charities, which are unclear in some aspects. The report states:
 it would appear that there is no official source of advice and guidance on these matters in Northern Ireland.
In his foreword to the report, the Minister commented on the
 complex intense legal problems surrounding this issue ".
He promised to consult interested parties about charities. My hon. Friends and I should like to be told how the consultations are going.
Rating reform was raised in the recent report of the working party. Paragraph 10 of the report indicates that the Department of Finance is still—six years later—trying to find the most equitable method of striking a regional rate. I recognise that it is an involved matter, but some time has elapsed and that draws attention to the need to indicate to ratepayers the services to which they contribute.
The Minister must realise that there will be requests for a fuller debate on the regional rate. I am sure that he has read the letter from the Lord Mayor of Belfast, Mr. David Cook, which was published in the Belfast Telegraph on 17 February. On the general subject of rate reform, he pointed out that the Layfield committee did not report on Northern Ireland. He felt that, despite the existence of the working party, a ful-scale inquiry was still needed. The Lord Mayor believed that the working party report did not go far enough.
I shall not pursue the matter further except to say that I believe that the House should have the opportunity to discuss fully the regional rate. The Government have said that no final decisions have been reached, but the provision of information on the services to which ratepayers contribute through the regional rate is a necessary reform.
With those matters in mind, my hon. Friends and I agree with the order.

4.42 p.m.

Mr J. Enoch Powell: On the principal subject covered by the draft order, there was general satisfaction in the Province when the Lawrence


committee was established in 1976, and considerably more satisfaction when the committee's report was published in 1977, simultaneously with a broad acceptance of its recommendations by the Government In his prefatory letter to the report, the then Under-Secretary of State for Northern Ireland announced that the Government would legislate accordingly as soon as possible, subject to consultation.
No one denies the importance of consultation; but that alone is not sufficient to account for the lapse of one and three-quarter years—between June 1977, when the report was accepted, and 1 April 1979, when the new law will come into effect, presumably for the new rating year. Incidentally, I hope that in winding up the Minister will clear up the question whether the new provisions will be fully effective for the whole of the new rating year, 1979–80.
So a whole year has been lost; for the public of Northern Ireland were justified in expecting that the legislation would be produced a year earlier. In that case, they would have enjoyed a year sooner the advantage of the recommendations of the committee that were accepted by the Government. That cannot be made good now. It follows that the public of Northern Ireland have been cheated of one year's value of the Lawrence report recommendations.
If the Government had needed to legislate in the proper fashion, that might have provided an excuse; but the procedure of legislation by Order in Council under direct rule deprives them of the plea of time. The Minister will, I hope, forgive me if I place on record the disappointment felt in the Province which succeeded to the general satisfaction that prevailed in 1976 and 1977.
I turn to the question: who pays? For there may be misunderstanding about the cost—it is described as cost in the Lawrence report, and the Minister described it in that way—of these reliefs. Without prejudice to the desirability of the reliefs, we should be clear who is paying for them. I believe that I know; but I will try my theory on the Minister and when he winds up he will mark my examination paper and tell me if I am right.
There are two elements to the rate in Northern Ireland—the district and the regional rate. In the case of the district rate it seems clear that the burden is transferred

to other ratepayers. To that extent, it is a rearrangement of the rating burden. That makes it no less desirable; but the people of Northern Ireland should not feel that they have been given something like manna from heaven from outside the Province. However well justified, this is a rearrangement of the existing burden.
I am not so clear about the regional rate, because it is not a rate at all but an assessment of what the average ratepayer would be paying if he lived in a comparable part of Great Britain, plus or minus adjustments. What he would be paying in that imaginary situation in Great Britain is partly the result of the Exchequer grants payable in support of rates. If I am right so far, I should like to know whether, in respect of the regional rate, the full cost of the redistribution still falls upon the ratepayer or whether a notional adjustment of Exchequer grants is to be made for the notional area with which we are compared in fixing the regional rate in Northern Ireland. In other words, does one pennyworth of the cost of these concessions come from the Exchequer, or does 100 per cent. come from the ratepayers in Northern Ireland? I hope that that point has been seized by the Minister, because it is desirable that we should know precisely who is paying and who is bearing the burden.
I do not believe anyone would cavil at the principle of the three major changes made by the order. The first is the improvement, with some exceptions, of the rating relief enjoyed in respect of sporting and recreational hereditaments. It puts Northern Ireland at a slight advantage when compared with the corresponding but varying relief in Great Britain, and there is no harm in that. The hon. Member for Abingdon (Mr. Neave) rightly said that no direct comparison of rating is possible between the Province and the rest of the United Kingdom because Northern Ireland has no responsible rating and spending authorities; and I should like to underline his point about the urgent need for a debate on the rating system and on the working party report. On behalf of himself and his colleagues, my hon. Friend the Member for Antrim, South (Mr. Molyneaux) has strongly represented to the Government that there should be a full-scale debate on that


matter. It may be that it would be more effective in the Northern Ireland Committee; but it ought in any case to be a full-scale debate and we ought to have it before the beginning of the new rating year—in other words, in March. It would be absurd for rate demands to be sent out and the usual misunderstandings, complaints, queries and puzzlements to arise in the Province, and then, after all that had subsided, for us belatedly to get around to debating the general subject.
I am not trying to distract attention from our immediate subject; but we can hardly talk about any rating measure without realising that the general debate hangs over us like a cloud whatever relatively subordinate matters we deal with.
The second major element in the draft order is relief for community use of halls that are not in charitable or community ownership. Only those who axe familiar with Northern Ireland can fully appreciate the benefit that could accrue from that measure. There are many parts of Northern Ireland, particularly in rural areas, where there are no community halls other than those created for a special purpose—Orange halls, Hibernian halls and so on—which are often made available for purposes not connected with the bodies that own them, and which are the only thing approaching community halls to be found in those areas.
As one goes around and notices the amount of money and local initiative which went into building those halls a century or a century and a half ago and sees how difficult many of them are to keep up, one is bound to wish that the maximum use might be made of them. I say that with no prejudice to the full execution of the purposes to which they are dedicated; but it is absurd if those buildings are not providing, as fully as desired, the community service which they could. In many parts of Northern Ireland there is a desperate need for publicly available accommodation for meetings and community activities of all sorts.
The third major element of the draft order is rating relief for the accommodation of disabled persons in Northern Ireland to be brought up to the standard established in the rest of the kingdom by the Act of last year.
Anyone must approve and welcome those objectives and the broad manner in which they are carried out in the draft order, but, for the avoidance of doubt and the improvement of the understanding of the draft order, I wish to discuss specific aspects. If hon. Members from other parts of the kingdom who are crowding the Benches—no doubt in expectation of the later debate on the European Economic Community, which also always attracts a large attendance—find some of the details dry and a little uninteresting, they ought not to complain. They should remember that for representatives from Northern Ireland the asking of questions on the provisions of a draft order is our only equivalent to the consideration of legislation in Committee. Hon. Members should share our grudge that we do not yet, in all respects, enjoy the privilege of being able to join in the proper form of legislation.
I have a series of queries and requests for clarification. I hope that the Minister will bear with me if, for the purpose of clarity, I use the pages of the draft order rather than the articles, because we find one numbered article inside another and that is a confusing method of notation.
I start by referring to page 3 of the draft order and paragraph (5)—the provision that enables a reduction to be made only for that part of the year in which a hereditament is used in the relevant manner. Clearly there is a broad fairness in such a time apportionment, but there is a worry—and nothing that the Minister said resolved the problem—that some of those premises may be devoted to sports or recreations that are essentially seasonal, so that the hereditament, in the nature of things, would be used for only part of the year. If the result is that the hereditament will get only part relief, it would be as unfair as the general principle is clearly justified.
Paragraph (6) on page 3 deals with the definition of a prescribed recreation. There are two qualifications. A prescribed recreation is one which
 in the opinion of the Department demands an appreciable degree of physical effort ".
One can hardly say that the term
 an appreciable degree of physical effort 
is a precise and clear limitation. No category of activities immediately springs to mind when one hears that expression. The


vagueness—and any anxiety due to the vagueness—is not diminished when it is to be
 in the opinion of the Department 
that the activity demands that degree of physical effort. I find that most of our activities demand
 an appreciable degree of physical effort ".
I do not know how it is with the Minister; but I imagine that most of his activities require some degree of physical effort. He may, however, be disappointed to reflect that that effort, by itself, will not be enough, for there is a second qualification. The recreation must be
 of a kind specified by the Department ".
The Department will pick and choose between activities and recreations demanding
 an appreciable degree of physical effort ".
A number of doubts and difficulties have arisen here. The order requires consultation with the Sports Council for Northern Ireland and the Minister indicated that consultation would not be restricted to the council; but I put to the Minister the proposition that the contents of the list are, in effect, what will decide the application of the order, and that the draft list ought therefore to be published by the Department well in advance, so that opinions upon it can be given by members of the public, criticisms can be publicly raised, and hon. Members can have the opportunity of knowing in advance what is to be done.
Of course, that would not be so necessary if paragraph (6) did not contain the usual lie that the order will be made subject to affirmative resolution. As the Minister candidly explained, that does not mean what it says. It means the opposite. The order will be made subject to negative resolution, and there will be no debate on it—unless we organise a special debate, out of time, in the Northern Ireland Committee. It follows that the Minister should be in a position to undertake that the list, whatever it is or is not to comprise, should be published well in advance and be open to public scrutiny.
However, I wish to make one or two comments now. In paragraph 68 of its report, the Lawrence committee said that it expected the list to exclude
 any kind of recreation that obviously is not in need of rate relief ".

I find that an objectionable proposition in principle. If we are giving rate relief to certain activities—rate relief which is only available if those activities are not conducted on a profit-making basis—I cannot see why there should be any discrimination between one kind of recreation and another according to whether it
 obviously is not in need of rate relief.
Rate relief is not given on a means-test basis. It is given on a basis of definition. It seems to me a contradiction to the general principle of what is being done if the Government follow that unwise recommendation of the Lawrence committee.
I do not know whether the object was to keep out fox hunting, stag hunting, or even hare hunting—I believe that there is the odd harrier pack, although they occasionally riot after fox—but it could happen that all kinds of recreations which are just as much so as those proposed to be put in the list would be excluded on the unsatisfactory basis that "everyone knows that only the rich pursue those recreations and there is plenty of money for them anyhow".
There has been circulated a draft list compiled by the Sports Council. It is the list of activities for which it now recommends or organises various forms of grant. I notice that it includes riding. So I presume that riding stables, if they are not profit-making, will be included in the derating. I am not sure, therefore—I shall not ride this hobby-horse any further—that there would be any justification for exclusion if those who left the stables to ride were to have a pack of hounds in front of them. I can assure the hon. Gentleman, if he does not know it from personal experience, that that does involve
 an appreciable degree of physical effort ".
So we want much more clarification and much more opportunity to discuss the all important list of prescribed recreations.
I come next to that word "solely", which already has caused so much heartburn amongst those who may be benefited by the order and has been mentioned already three times in the debate. Until the Minister spoke, I thought that I had understood the function of the word "solely". I thought the point was that hitherto hereditaments had been taken as such and therefore, if the word "solely"


had been used hitherto, it would have excluded a great many from this relief if they were not wholly devoted to the purposes of a prescribed recreation. But the relief is now to be on a new basis—on the basis of taking the hereditaments to pieces, looking at them part by part, and seeing which parts are directed to the purposes of the recreation.
If that is so, I am a little worried by the significance of the word "solely" still being attached to part of a hereditament already isolated for the purposes of attracting rate relief. There was a case mentioned by the Minister which gave me even more anxiety. He said that a room which was otherwise used purely for recreation purposes might once in the year or occasionally be used for a dance. What I did not understand was whether in his view that would mean that "solely" would exclude that gymnasium or room unless it could try to get in under "part of the year". So we need to understand the way in which the word "solely" is to be construed under the new system of dividing up a hereditament and identifying only those portions dedicated to recreational purposes.
My anxieties were further heightened when the Minister seemed to say "This may or may not work out, but do not worry, for we shall have a review in two years." If the Minister were as sure as the Department has purported to be in its negotiations with the Sports Council that there is nothing to worry about in the word "solely", I do not see why the consolation of a review after two years should be held out. It would be much better to get the thing right now, especially as in the intervening two years premises which should have attracted rate relief may have failed to do so. I am afraid the Minister will have to go further on the subject of that wicked little word "solely".
I come to the question which I put to him, the answer to which, perhaps wisely, he deferred to his reply to the debate. Let me try to explain where my difficulty lies. I take him to the final paragraph on page 3 of the order. Where the amount of the total rateable value apportioned to purposes of recreation is between 20 per cent. and 50 per cent., that apportionment stands for the purpose of derating, if I may use that word: that is the

apportionment which attracts the 65 per cent. relief. Thus, if 40 per cent. of a hereditament is apportioned to prescribed recreational purposes, it is only to that 40 per cent. that the 65 per cent. relief applies.
Let me now give an example to illustrate my difficulty. Here is a hereditament of which 49 per cent. is so apportioned. It gets 65 per cent. relief on 49 per cent. But if the apportionment is 51 per cent., 71 per cent is the proportion to which the 65 per cent. is applied. So there is a gap between 49 per cent. and 71 per cent., and no one is in the middle. It is rather like going straight from 1 B.C. into 1 A.D.: one comes out of the zone in which only the actual apportionment attracts the 65 per cent. into a zone where it is the apportionment plus 20 per cent. which attracts rate relief.

Mr. Pendry: Twenty per cent. of 50 per cent. in this case would be 60 per cent. and not 70 per cent. Perhaps that makes the position rather more clear.

Mr. Powell: I am sorry to have to tell the Minister that he will have to deal with the problem at greater length and spell it out in more detail to help me. I am sure the deficiencies are mine; but, in case they are more widely shared, the hon. Gentleman's time will not be wasted. I quite understand what happens at 80 per cent. and upwards: Eighty per cent. and upwards attracts 65 per cent. upon the full 100 per cent. But I am still stuck over the difference between the 20 to 50 per cent. zones and the 50 to 80 per cent. zones. Perhaps the Minister will come back to that when he replies to the debate.
The last of the major difficulties of construction in which I am convinced I am not alone relates to what the Minister called "potential use". Article 4(2)(b) on page 5 refers to
 the total number of sessions that might reasonably be regarded as available for all active uses in that year…
I am not sure whether that is the point in the order where potential as opposed to actual use comes in. Whether it is or not, I find it a difficulty about "potential use", which I should like the Minister to explain. I use as an example an Orange hall in a fairly isolated area. Perhaps half a dozen times a year there may be circumstances in which an application is made and granted to use the hall for community purposes. So those sessions go


towards the totting up process—an ominous phrase but one that will be understood—for qualifying for relief. But how can we possibly imagine the number of sessions which would have been devoted to community use in that hall if only more people had asked for it? The potential use is very much larger. It may be that the hall is used only once a week, and possibly less than once a week, for the purposes for which it was created. Is it not therefore potentially available for the rest of the year?
I hope that the Minister will explain much more clearly how potential use, as opposed to actual use, is to be estimated and calculated. This will be specially important in the rural areas. It may make the difference between this order helping to preserve halls in existence and not doing so.
The last section of what I fear is a somewhat dreary survey of the order relates to the matters in which this draft order differs from the proposals for the draft order. They represent the improvements which the Government have introduced as a result of further reflection or the comments made to them. The first is the extension to parking places and to
 any part of a hereditament constructed or adapted for use by such persons (or by persons who have engaged or intend to engage in the recreation) as a bathroom or lavatory or for use wholly or mainly for the storage of their clothing or of equipment ".
It is certainly something if people who play basket ball can have derating on their car park and derating on the place where they keep the balls and where they change and take a bath after this considerable "degree of physical effort", but I am not sure that such facilities exhaust what might be called the inevitable and direct appurtenances of physical recreation.
What about the spectators? Many of these sports, in the nature of things, require as part of the premises the minimal essential accomodation for spectators—I am not thinking of bars and entertainments—and for those who accompany the teams. Is the Minister sure that those elements are necessarily covered by this tightly drawn definition of ancillary parts of the premises? It does not seem to me, or to the Sports Council, that the order is drawn wide enough. I hope that in its interpretation and application

the letter of the law will not be jealously observed; otherwise, some absurd anomalies will be created.
There is also the provision for phasing out the relief or a part of the relief which is enjoyed at present but which will be lost in due course under the order. The Minister owes it to the House and the Government owe it to the public in Northern Ireland to be more explicit about their estimate of the number of establishments and organisations which will come under that provision.
What proportion of the people who are now enjoying the lesser degree of relief is it calculated will lose relief altogether or receive it on a reduced scale? It should be possible to make an estimate. Samples are presumably taken. Samples were probably taken for the purposes of the Lawrence committee. One accepts that there may be the occasional instance where there will be this phasing out of two years; but it is a little alarming to be presented with this major provision for phasing out when one hopes that there will be very little phasing out at all.
The third improvement I noted is in article 4(l)(f)(iii), where the point is taken that where a body itself engages in qualifying activities it is the expenses actually incurred by it and not the expenses necessary to defray costs which are the upper limit of what may be charged for the facilities. I put it clumsily, but I hope that I may have conveyed the point to the Minister.
I now have three or four minor queries, though I hope that they will be not so minor as to be despised by the Minister. In page 4, paragraph (3)(c) contains the words:
 by reason of the substitution of article 31 made by this Order.
I cannot understand what is meant by those words, nor can I find any place in the order, though I may have missed it, where something else is substituted for article 31 of the principal order. Perhaps the Minister could draw my attention and that of other hon. Members to it
On page 6, paragraph (7) provides:
 If too large an amount "—
that is, of rates—
 has been paid or allowed by way of rebate, the excess shall be recoverable summarily by the Department as a debt ".


I do not understand why excess rates which have been paid by a ratepayer should be recovered summarily by the Department as a debt. Does the Department recover them from the rating authority in order to repay them to the unfortunate ratepayer who has paid too much, or is there a drafting error? I have made my best endeavours, but I cannot construe it. I hope I shall have the Minister's help.
My last minor irritation is the last article of all, at the bottom of page 9. There is no doubt good reason why justices of the peace no longer need to be indemnified where a warrant of distress is granted in respect of a defective rate; but as we are taking the portentous step of amending section 4 of the 1849 Act, we should have some explanation why what we are doing in the order makes this necessary.
I apologise to you, Mr. Deputy Speaker, and to the House for a lengthy and necessarily largely boring disquisition on the order, but I accompany my apology once more with the observation that it will no longer be necessary to inflict on the House or the Chair this not wholly effective form of interrogation of the Government when Northern Ireland is once again fully and invariably legislated for in the same way as the rest of the Kingdom.

5.19 p.m.

Rev. Ian Paisley: This order has been awaited in Northern Ireland for some time, and the delay is greatly to be regretted. The Secretary of State talks continually of the benefits of direct rule, this benign type of government, but it is evident today that it is ineffectual, that it operates at the cost of the ordinary individual and that it is detrimental to the well-being of the people of Northern Ireland.
Unlike the right hon. Member for Down, South (Mr. Powell), who has just left, I look forward to the day when this matter, which is important to the people of Northern Ireland, will be discussed by Northern Ireland representatives in a Parliament and action will be taken by that Parliament to meet the needs of the people. Nevertheless, in this almost incomprehensible order, we have to deal with problems affecting the welfare of the people of Northern Ireland.
It is an appalling fact that rates in Northern Ireland have soared in recent years because of the delay in revising rateable values. Some halls in which I am particularly interested and which were rated reasonably have now had their rateable value increased far beyond the ability to pay of those concerned.
We must keep in mind the dark back-cloth against which we are dealing with this subject. The rates of business and other premises have multiplied over the past couple of years.
There is a form of appeal against rating assessment. How many appeals in Northern Ireland have been proceeded with and how many have been successful? The feedback that I am getting is that it is useless even to appeal, because the system does not seem to work and the vast majority of people see no tangible result. Will that system continue under the order?
When the appeals are heard, I assume that the Department will already have had the list prepared under which people will be in or out of the system. As the right hon. Member for Down, South said, that list must be published, and in good time, so that people understand the situation.
Although relief on recreational premises is necessary and will be valuable, the heart of the matter is the emphasis on the word "solely". As the hon. Member for Down, North (Mr. Kilfedder) asked in an intervention, would it not have been better, while trying this out for two years, to use the word "mainly"? Then, if the Secretary of State felt that the matter was not proceeding satisfactorily, he could reconsider it. Why not give the benefit of the doubt the other way?
I urge the Minister to consider that matter. He said that the proof of the pudding is in the eating, but I believe that that means that it would be better to use the other word. If a review were necessary, it could be done in two years.
In the order there is a strange reference to
 physical effort…of a kind specified by the Department, after consultation with the Sports Council for Northern Ireland ".
Does that mean that the council will give the Minister a list of sports requiring that degree of physical effort, and that then


the Department will decide on the final list? This could be interpreted in a very large way.
Some people have suggested—the Minister would not know about this—that in these halls some rites and ceremonies take place which require a great degree of physical effort. One wonders whether the Minister had them in mind in this provision.
Of course, everyone will welcome the relief which is given for the disabled. It is an act of justice, and it is good that justice will be done and be seen to be done.
Article 4 is the article under which many halls in Northern Ireland will seek some relief. As the Minister knows, Northern Ireland is dotted with Orange halls, with halls connected with the other Loyalist orders—such as the Apprentice Boys of Derry—and with Independent Orange halls. Then there is a whole series of Protestant halls used both by the Orange institutions and for other religious purposes. There are some band halls. On the other side of the religious divide, there are the halls belonging to the Ancient Order of Hibernians.
Many of these halls meet a specific need in individual places. One hall in my area is used for a monthly meeting 10 months of the year, but it is also used on Sunday for a Sabbath school and for special religious services on many Sunday evenings. That is an example of a hall used primarily for religious purposes, although it is not owned or controlled by any religious body. The body that owns or controls it uses it less than the other bodies.
Would it not be wise to exempt such halls on religious grounds? At the moment, provided that a church hall is attached to a place of worship, it is completely exempt. Many of the church halls of Northern Ireland are exempted from a strict interpretation of the rules for rating relief.
There are activities in some halls which one cannot enter except by paying for a ticket to get in. There are organisations which meet in them to make a profit. Bingo sessions are held in many of these halls, yet they are completely exempt. They escape under the religious tag, although much of the activity in them is not religious and has nothing to do with

religion. For example, bingo, in my view, has nothing to do with religion, and the same applies to some of the other activities carried on in these halls. Yet, as I have said, I know of a hall which, although it is used far more for religious purposes, finds itself caught under the rating laws at present operating in Northern Ireland.
I press that question upon the Minister for his consideration. I had thought that when this matter came to the House such an issue would have been taken on board, since strong representations have been made about it both in the committee and to the Department. I ask the Minister to be good enough to enlarge upon this important issue when he replies.
As has been said, some of these halls are in isolated areas. Many of them are shuttered up for the best part of the year. In addition, many of them are seldom used outside the activities of the particular Loyalist orders which control them, for two simple reasons: first, the request is not made, and, secondly, some of the activities which people might want to engage in would not be acceptable to the hall trustees.
How is a hall to be judged by its "potential"? I shall give an exaggerated example so that the Minister may know what I mean. Let us assume that there is a certain Hibernian hall in North Antrim, and a group of people desire to have a meeting in that hall. Let us assume also that both the religious and the political convictions of that group would be entirely contrary to those of the trustees. One could hardly expect the trustees of the hall to be excited about the prospect of letting their property to such a body. The same could apply on the other side of the divide to an Orange hall.
We need the Minister to define what he means by "potential". The opportunity for people to claim and get relief will depend on that definition.
Another option has come about, namely, the lining up of these halls with particular church bodies. It is an amazing fact that if a hall is lined up with a church body it can carry on all manner of activities and be relieved of rates simply because it is aligned with a church body. I know of certain halls which are now lined up with local churches in order to share the privileges which a church hall


could have, so that as a church hall they will have a far greater privilege than they would receive if they had no religious status. The Minister must take all these matters on board.
I turn now to the question of band halls. Will music be looked upon as recreation? We in Northern Ireland pride ourselves on our bands. Those who go to various demonstrations know something of the potential of the musical ability of the people of Northern Ireland. This is part of our culture, and a very important part.
Will a band hall be able to claim exemption? These band halls are used almost solely for band practices, for keeping the instruments and for a meeting place. Will they be completely exempt? I see that the hon. Member for Belfast, West (Mr. Fitt) has come to hear the music. He has acquired quite a skill on the mouth organ, and perhaps he will claim some exemption from rates on a certain house now taken over by the Housing Executive. Will the Minister please clarify the position of band halls?
Next, we want to know about drumming clubs. Anyone who takes part in this recreation, if I may use that term, uses quite a degree of physical energy. I know that the hon. Member for Armagh (Mr. McCusker) is an expert, and I am sure that he would agree with me that drumming takes an appreciable degree of physical effort. I understood that once upon a time the hon. Member for Armagh and the former Member for Armagh had a drumming contest, and both of them expended an appreciable degree of energy in that contest. Is a hall used by a drumming club to come under the relief?
People in Northern Ireland are asking these questions, and they should be answered here today. They go right to the grass roots of the community and everyone is interested in them. I am sure that the Minister will feel that it would be wrong for such halls as I have described to close altogether. Whether or not he agrees with the organisations which run them, they bring people together, they have a cultural contribution to make, and they are part of the whole structure of Northern Ireland.
I revert to the question put by the right hon. Member for Down, South.

Who does the paying? It is sad that we are having this debate today before we have a full debate on rates, and especially the regional rate, in Northern Ireland. The House should have taken time to consider the whole rating system, especially the regional rate, so that we could know exactly where we were going. We could then have discussed the order in a better and perhaps more informed way.
Apart from the points which I have raised—which the Minister may think are overwhelming—I welcome the tenor of the order and the relief which is offered. I congratulate him also on one other matter, and he may take it that, of course, I should oppose any attempt to give relief to the alcoholic beverage bars which would be set up in some halls. If people want to indulge in that sort of thing, let them pay for it. It is not for the general public to give them relief for it, and I appreciate the Minister's stand in that matter, which is widely welcomed by a large section of the people of Northern Ireland.

5.39 p.m.

Mr. John Biggs-Davison: My hon. Friend the Member for Abingdon (Mr. Neave) expressed the gratitude of Her Majesty's Opposition to the Lawrence committee, and there will be universal assent to that. There will be general agreement also—though on the Labour Back Benches and the Liberal Bench it will be a case of silence by absence signifying consent—that the order should be approved.
Every right hon. and hon. Member who has spoken thus far has said that it is essential that there be a general debate on the whole rating system. The right hon. Member for Down, South (Mr. Powell) suggested that it might well be held in the Northern Ireland Committee, and that seems appropriate. When the Under-Secretary of State replies, I hope that the House will receive clarification on the forms of recreational activity that will qualify, how they will be selected and put on the list and what appurtenences—this was raised by the right hon. Member for Down, South—may be included.
Orange halls, Protestant halls and Hibernian halls were referred to by the right hon. Member for Down, South and the hon. Member for Antrim, North (Rev.


Ian Paisley). Community halls are especially important to the social life of the Province.
The hon. Member for Antrim, North took an imaginary example featuring a Hibernian hall. On the other hand, I recall being told by the former Member for Armagh, to whom reference has been made, that at a certain place an important convention was to take place in the local Orange hall and it was normal for the reverend mother of the nearby convent school to provide the extra chairs required. That is not an untypical irenic aspect of Ulster life, that should be more widely known.
I confine my remarks on the order to article 3 and the reduction of rates on recreational hereditaments. The hereditaments include those of the Gaelic Athletic Association. Before I say another word on the subject, may I say that I admire the proper activities of that body. It is part of the rich and manifold tradition of Ulster and is worthy of encouragement. However, as the House knows, in GAA rule 15 what are called
 British soldiers, navy men and police 
are banned from membership. It is a commentary on the antiquity of that offensive ban that Royal Air Force men are not excluded. I do not know whether any British airman has put the matter to the test.
Ministers will know that I have called attention to the scandal when the House has debated previous rating legislation. I also sought the advice of Archbishop O Fiaich. I did so before Christmas. The primate has not so far replied.
There is no justification in history or logic for identifying Gaelic culture and sport with a certain faith or allegiance. The Gaelic League in its early days embraced unionists as well as nationalists, and there have been Gaelic-speaking lodges of the Orange order. Nevertheless, I am not concerned to argue that such a society is not entitled to limit its membership, although recent race relations legislation has invaded that right. However, I contend that taxpayers and ratepayers, including members of Her Majesty's Armed Forces and the police, should not be expected to subsidise such an organisation while it continues to discriminate. The GAA benefits from grants, although not to the same extent as

bodies with a completely open membership. The order is concerned with another form of subsidy—derating.
I conclude my remarks by putting some questions to the Minister for his consideration. Does he think that the GAA should continue indefinitely to benefit from rating relief while the discrimination is continued? If he thinks that it should continue indefinitely, does he think that that would accord with section 19 of the Northern Ireland Constitution Act 1973? The hon. Gentleman will know that Mr. Justice Murray had occasion to refer to that in open court.
If the hon. Gentleman thinks that the relief should be continued despite the continuance of the ban, what are the Government and the Northern Ireland Sports Council prepared to do to try to persuade the GAA to revise its rules, at least for Northern Ireland? Are the Government prepared to sound a gentle warning that the relief cannot be counted on for ever if the GAA persists with the ban? I doubt whether members of the GAA who are involved in this insult to servants of the Crown would wish to renounce the protection that those servants give. Without the servants of the Crown who are banned, there would be small chance of peaceful recreation and sporting activity in Northern Ireland.

5.45 p.m.

Mr. James Kilfedder: The presentation of the draft order emphasises once again that Northern Ireland is being treated unfairly and that the Ulster people are being treated as second-class citizens within the United Kingdom. I am not able to move an amendment to the order. If that were possible, I should do so. Every other Member representing other parts of the United Kingdom may table amendments to legislation dealing with Great Britain. If I had the opportunity of introducing an amendment, I should wish to replace "solely" in the new article 31 with "mainly". The article as it stands will deal unfairly with sporting and recreational clubs and will cause them further financial difficulty.
I have spoken to the Under-Secretary of State about the draft order. I have written to him about it and he has received representations from some of my constituents. I am sad that he has


not been able to accept the arguments put to him. I only hope that he will reconsider the matter. No matter what other hon. Members may say, I am an optimist. I hope that he will reconsider his position before he replies.
With that proviso, I generally welcome the changes outlined in the draft order. However, I deplore the Government's failure to recognise that no amount of tinkering around the edges of the rating system is likely to meet the main criticism. Before I comment on the provisions of the order, it is necessary to reiterate for the benefit of those who have no personal experience of the Northern Ireland rating system that it has none of the elements of democratic control that are commonplace in England, Scotland and Wales. That is highlighted by the fact that rates in Northern Ireland have soared, and Ulster people wish to complain. I wish to protest to the Government about that on their behalf.
I should like to see shortly a debate on rating in Northern Ireland. No accounts are kept by the education and health boards or by the Department of the Environment—the latter is the body responsible for roads, sewerage and water—to show the cost of rateborne expenditure.
The rates in Northern Ireland are fixed not by the democratic decision of Ulster people but by the decision of a local authority in the North-East of England. The rate for Humberside is taken by the Northern Ireland Department of Finance and fixed for home owners and businesses in Northern Ireland irrespective of cost implications.
As no accounts of rateborne costs are kept, the Minister will be unable to say how far the changes proposed in this order will affect local government finance. The reason is simple. He does not know because, under the present undemocratic system and structure in Northern Ireland, there is no way of exactly determining the costs. The changes should have been made in the original rates order. The fact that these changes must be introduced now indicates laxity, ineptitude and haste by the Government when introducing the original rates order.
I was surprised that the Minister said that this matter would be reviewed in two

years. He should have made sure when bringing forward an order of this kind, which we are not able to amend, that it would clearly benefit people in Northern Ireland. Unfortunately, the changes will do nothing to lessen the burden of rates on private householders. That burden is intolerable.
The details of this order are inadequate in some respects. For example, the Sports Council is to be consulted about the physical nature of the recreational use of a hereditament. Does this mean that the Sports Council will be available to answer questions by an aggrieved ratepayer in the event of an appeal? Furthermore, why should the Department of Finance consult with the Sports Council? Why should it not consult with the Department of Education, which has financial and parliamentary responsibility for the Sports Council?
There are 1,200 halls in Northern Ireland. About 900 are Orange halls. Many are in a dilapidated state. Most were built more than 100 years ago. These halls serve an extremely useful function in the community. Many halls exist in the rural areas. However, they need money for their upkeep and, for instance, for car parks. Will the Minister consider helping these halls financially if they are used more extensively for community purposes? Will the Minister aid them by making financial help available for the creation of car parks? That would be a great asset to old-age pensioners, members of tenants' associations and other people using cars in rural areas. There is therefore a great need for car parks. Will the Government give aid for the provision of catering facilities and the upkeep of roofs? It would be helpful if something could be done in those respects.
I refer to the word "solely", about which the Minister received representations. The Minister gave the impression—I do not think that it was deliberate—that the order would confer great benefits on most, if not all, sporting and recreational clubs in Northern Ireland. Does he agree that a good many sporting and recreational clubs will not be better off as a result of the enactment of this draft order? A number of clubs must pay increased rates. Therefore, I repeat my plea to the Minister to reconsider his refusal to delete the term "solely" from the draft order.
A club exists to provide recreational and sporting facilities. However, it needs all the money it can get if it is to ensure the continuance of full activities for which the club was established. The Minister will agree that wherever a room or rooms in a club are used, for instance, for fund raising activities, that contributes to the survival of that sporting and recreational club. More than likely it will help to increase the facilities that it provides for the people of the community.
It is the wish of all Members of Parliament that as many recreational facilities as possible should be provided in Northern Ireland so that young people will not be at a loose end and, as a consequence, be caught up in unlawful or antisocial behaviour.

5.57 p.m.

Mr. Wm. Ross: I welcome the concessions for disabled people contained in the order. They will receive a general welcome throughout Northern Ireland, and I should like to associate myself with that welcome. I believe that the disabled need all the help that they can get. Great costs are incurred by many individuals in altering their homes when disabled children are born. I am happy that the burden of rates that could result from such alterations is now to be removed.
The Minister will have noted, as a result of the time that he spent in Northern Ireland, the large number of halls in the Province which play a large part in community life there. He will also be aware of the shift of population and social attitudes which has resulted in financial difficulties for those halls. Many of the halls throughout the country were formerly used for dances. Now the singing pubs provide for that kind of recreation. I do not think that that change can be welcomed when we consider the toll of life and limb that has resulted. The results of the change are apparent to me as I lived through the period when it took place. I always thought that turning public houses into dance halls and places of general entertainment was a grave mistake for which Northern Ireland paid a high price.
The second feature in recent years has been the large numbers of community halls which have been erected in Northern Ireland. My experience of community

halls is that if people are interested enough to form committees of energetic people to run them, they are of great benefit. If there is not a sufficiency of people to take the trouble, the halls become white elephants. The halls must be sited in areas where there is continuing enthusiasm. The enthusiasm must come from a considerable number of people. We must build such halls in urban areas. They are of very little use in the really small communities and in the rural parts of Northern Ireland.
The new problem is that every little estate in Northern Ireland wants a community hall. I hope and trust that the order will open so many doors that some of that outcry will die away. Many halls are not used at all except by the bodies to which they belong. There is no good reason why those buildings should not be put to community use in Northern Ireland.
The apparent concession in rates contained in the order for Orange halls, Ancient Order of Hibernian halls, band halls and so on will not in the long run be seen as a concession. It is, in fact, something that will repay the community very many times over, because the change in the use of those halls that will result, as the benefits inherent in the order seep down through the community and become more clearly understood in the community, will be such that much public expenditure that is at present being demanded will be found to be no longer necessary.
I hope that the Minister and his colleagues will impress upon the council authorities—and especially the recreation officers of local councils—the opportunities which will now be available to the owners of halls and to the community at large, without any real cost to the community. Indeed, there will be a great saving to the community in the use of these halls.
A second body of people who could be approached to use their good offices in this respect are the education and library boards and their members, and especially the very few elected members that the education and library boards have. These are people who live in the community and are aware of the needs of the community that they serve. They could be very valuable in broadcasting the


advantages contained in the order to the community at large as well as to those who are in ownership of the various halls.
I hope that the Minister, when he replies, will deal with the position of community halls in general, and especially with the position of town halls which are no longer being used by the council for its officers or staff but which are now used solely for community purposes. There are several such halls in my constituency, the two principal ones being in Coleraine and in Limavady. I should like to know whether these halls, which belong to the council, will be liable for rates or whether they are exempt under this order or under some other order. It is a matter of some importance to the people who use the halls, and I hope that the Minister will take this opportunity of dealing with it.

6.3 p.m.

Mr. Pendry: I first thank those hon. Members who have participated in the debate and have helped to make it such an interesting one. I am sure that they will understand that I cannot answer fully now the questions fired at me. I undertake, in the usual way, to send to each Member a detailed answer to his questions.
I thank the hon. Member for Abingdon (Mr. Neave) for his general welcome to the order. He mentioned the question of the regional rate. It is right, I believe, that we should have a full debate on it, and arrangements will accordingly be made for that. I hope that that will be regarded as a good start to my reply to the debate.
The hon. Gentleman referred to cultural activities and asked what we were doing in that respect. He referred to a paragraph in the Lawrence report concerning relief for science, literature and art, and suggested that there should be wider publicity for the already existing relief. My Department is already taking steps to ensure that there will be adherence to that reference in the Lawrence report. We shall make sure that we get the message across more forcefully than we have up to now.
The right hon. Member for Down, South (Mr. Powell) made several points. I will take on board most of those points and write to him in detail, but I should

like to refer to some of them now. He asked about those clubs which will receive relief for only half of the year—for example, clubs which may use their playing fields for just a portion of the year. If a playing field is used only seasonally, this will be reflected in its valuation, and relief will apply on the full rateable value. However, should a playing field come into use for the first time midway through the rating year, it will receive relief for only half the year.

Mr. Powell: I am not sure that that answer, although I understand it, is fully satisfactory. After all, this is essentially a rating relief measure, and to say to a ratepayer "Your rating assessment, 100 per cent., is not very high, therefore you ought to be quite satisfied with less than the full relief which the order is awarding", is no satisfactory answer. I quite accept that if a pitch is usable for only half the year, the rateable value will to that extent be less, but that does not seem to be any reason for knocking it down by 50 per cent. on top of that before applying the rate relief. I hope that the Minister will look again at this point, because I think that there is an element of unfairness, although I understand his reply.

Mr. Pendry: I shall look at that again to see whether there is any unfairness. The points which emerged throughout the debate underlined the fact that one cannot win all the time. We believe that we have got it right, but we could be wrong. To meet the points raised by hon. Members on behalf of their constituents, we considered the question of providing an interim period of time. I think that we should be applauded for taking that kind of stand and for giving two years in which to see whether we have got it right. We can look at what happens during that period. However, it appears that somehow or other we have done the wrong thing. I thought long and hard before I did it, and I was sure that I had done the right thing.
The points raised by hon. Members will, as I have said, be considered. It should be remembered that during this period the full rate will not have to be met by those who are worse off. There will be some clubs which will be worse off, but we hope that their number will


be fewer than most people seem to believe. At the end of two years, therefore, if it is felt that there have to be modifications, we shall place them honestly before this House. I hope that in giving that assurance I have been able to encompass a number of doubts. During the two-year period we shall be looking very closely at the anomalies which are brought to our attention.
The right hon. Member referred to what he felt had been a lengthy procedure in dealing with the report. The Government considered it in great detail before coming to a point of view. That necessarily took time in this very complicated area. Discussion took place following the publication of the report in March 1978, and legislation was drafted and published in November 1978. I do not think that there was as great a delay, therefore, as some hon. Members seem to suggest. If the debate has proved anything, it has proved that this is a very complicated area, and I do not think that in the circumstances the Government took any great length of time in coming to their conclusions.
The right hon. Member for Down, South raised the question of cost. He put it fairly, saying that the cost would be spread between the district rate and the regional rate and, therefore, the Exchequer. The right hon. Gentleman placed it in the right context, and I concur with what he said.

Mr. Powell: Perhaps the Minister will be good enough to verify my point as to whether the notional Exchequer contribution will bear its due share of the reduction in the rate poundage which results from the order. I think he took the point, but I wonder if he will look at that.

Mr. Pendry: Yes, I give the right hon. Gentleman that assurance.
A question was raised—again by the right hon. Member for Down, South—about the word "solely". I do not wish to go over the ground time and again, but this was looked at closely by the Department. We concluded that in the main that was the right word to use and that the other words that were used were wrong. If we are wrong, that will be shown in our two-year investigation.
The hon. Member for Antrim, North (Rev. Ian Paisley) raised a number of points. I do not think it can be said

that rates in Northern Ireland have soared out of all proportion in comparison with the rest of the United Kingdom. Rates in Northern Ireland have generally kept abreast of the situation here. On the point that the hon. Member raised about how many appeals have been taken, I can give a guarantee that this matter is being looked into, and a detailed letter will be sent to him on this issue. I shall also look into the use of halls by drumming clubs, and I shall write to him on that matter also.
The hon. Member for Epping Forest (Mr. Biggs-Davison) raised a matter which I had not specifically looked into previously. This really is a separate matter and one which I shall have to look into afresh and write to him about. It is not something that comes out of this order, and I hope that he will accept that.

Mr. Biggs-Davison: Surely this is one of the largest bodies which is likely to benefit from the derating.

Mr. Pendry: The point is that if we were to go along that particular avenue it would defeat the whole purpose of the Lawrence report, which is, as we have said, the cornerstone of this legislation, but we shall look at this in the new context.

Mr. Harold McCusker: Bearing in mind an answer which the Undersecretary of State gave to my right hon. Friend the Member for Down, South (Mr. Powell), is it not the case that the very people excluded by this offensive rule will now have to pay extra rates in order to give relief to the GAA?

Mr. Pendry: Not at all. I shall say no more than I have already said. I shall look into this matter in isolation and write to the right hon. Member for Down, South.
The hon. Member for Down, North (Mr. Kilfedder) gave a general welcome to the order, which I thought was quite an achievement because he has been a consistent critic of it. I took some comfort from that.
On the question of consulting the Sports Council, we have not closed our minds to consulting other bodies. The important thing is that we get on with the job and get a prescribed list which is acceptable to those in Northern Ireland who are affected.
After giving a guarded and generous welcome to the order, the hon. Member for Down, North went on to say that he hoped the Minister would not think that he would be conferring any great benefits on sports clubs in Northern Ireland. I think that that is wrong. In the vast majority of cases the hon. Gentleman will find—and I am sure that at the end of the two years we shall be able to convince most people, if not all, of this—that this order will benefit the vast majority of clubs in Northern Ireland. I am sure that the hon. Gentleman is wrong in that regard.

Mr. Powell: Will the Minister kindly refer to the point about publishing the draft list? Quite apart from consultation with various bodies, will he let right hon. and hon. Members and others have a sight of the proposals well in advance?

Mr. Pendry: Yes. I did not miss that point, because I intended to refer to it in relation to the points raised by the hon. Member for Down, North. However, that is fair comment, and we must do that. The main point is that we have to hurry along and get this list out as quickly as possible. But that does not mean that we do not have to do it thoroughly. We ought to be able to publish that list and have public comment on it.

Mr. Biggs-Davison: Does that mean that we shall have a chance to comment on it, or will it just be presented to us as something that has been decided by

the Northern Ireland Office in consultation with the Sports Council?

Mr. Pendry: Hon. Members have been able to comment on this order at any stage. Certainly when anyone has come to see me to discuss it there has never been any hesitation on my part. In this context, hon. Members have every opportunity of making their comments known to the Department.
The hon. Member for Londonderry (Mr. Ross) made one or two points. Certainly the Government will spell out the new provisions to clubs and halls and make sure that they are as widely publicised as possible. With regard to town halls and their community use, I am not aware of the difficulties mentioned by the hon. Gentleman, but again I shall look into them and make sure that he has a detailed reply.
This has been a lengthy debate but, as I said earlier, it has been a very informative one for me, and one which does credit to the House. The provisions of the order do a great deal for the sporting and recreational bodies in Northern Ireland. We have met the main recommendations of the Lawrence committee, and in doing so I believe that we have done a great service to the sporting clubs and the sporting fraternity in Northern Ireland. Therefore, I commend the order to the House.

Question put and agreed to.

Resolved,

That the draft Rates Amendment (Northern Ireland) Order 1979, which was laid before this House on 7th February, be approved.

Oral Answers to Questions — NORTHERN IRELAND (JUDGMENTS ENFORCEMENT AND DEBTS RECOVERY)

6.16 p.m.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move,
That the draft Judgments Enforcement and Debts Recovery (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved.
It might be for the convenience of the House if I were to deal also with the other motion on judgments enforcement on the Order Paper.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Does that have the approval of the House?

Hon Members: Yes.

Mr. Davidson: The second of the two orders corrects only a minor drafting omission and I shall deal with it at the end of my remarks on the first order.
The main order, the Judgments Enforcement and Debts Recovery (Northern Ireland) Order, seeks to amend the Judgments (Enforcement) Act (Northern Ireland) 1969. That Act provided the machinery whereby judgments and orders of courts in Northern Ireland are enforced. The machinery set up by that Act has no parallel in the rest of the United Kingdom, and I am pleased to pay tribute to the right hon. Member for Belfast, East (Mr. Craig) who was instrumental in putting that Act on the statute book.
The right hon. Member's faith in the Act has proved justified and the procedure which he brought about—which, as I say, was a unique procedure—has been very successful indeed. For the benefit of the House, perhaps I could explain what that procedure is. I shall do so very briefly.
The Act set up a central office—the Enforcement of Judgments Office—in Belfast which deals with the enforcement of most judgments and orders made by Northern Ireland courts. A creditor obtaining a money judgment, or a person with the benefit of an order for, say, possession of property, and who cannot obtain satisfaction without further recourse to the judicial authorities, makes application for enforcement to the Enforcement

of Judgments Office, commonly called the EJO. Perhaps I may refer to it as such during the remainder of the debate.
This is very different from the position in England and Wales, where, if a litigant gets a judgment or an order from a court, it is to that court that in most cases he or she returns for enforcement. The advantages of the Northern Ireland system, in a small community and a relatively small geographical area, are clear. Over the years, the office has been able to acquire considerable expertise with regard to enforcement, and all information about debtors in Northern Ireland is gathered in one place. Therefore, the EJO acts not only as an enforcement agency but as a reference agency.
The register of applications for enforcement is a public register, and so acts as a means of determining creditworthiness. A similar function is performed, although much less comprehensively, by the Registry of County Court Judgments in England and Wales. The 1969 Act followed upon a report of a working party chaired by Mr. A. E. Anderson, who is now the Master of the EJO. In another place, my noble and learned Friend paid tribute to the Master, to his chief enforcement officer and to his staff for the way in which they have continued to perform the very difficult task of enforcement of the judgments of civil courts in Northern Ireland. I am sure that the House would wish to join me in its appreciation of the work that the office has done. It has managed to keep the confidence of the community and to carry on working and performing its duties throughout all the recent, difficulties.
The office has had a remarkably high success rate, if it is to be judged by the amount of money that it recovers. Last year, it dealt with nearly 5,700 applications. However, it would be surprising if after eight years it had not been found that some degree of revision and streamlining was needed in a system which was entirely new when first set up.
The proposals before the House today are part of a scheme of improvements for the office, which began with the vesting of ministerial responsibility in the Lord Chancellor. The order comes before the House after a detailed series of consultations which have involved all


those in Northern Ireland, and, indeed, in England and Wales, who have shown an interest in the order and its content. I am pleased to be able to say that, following upon that consultation, the order has met with a general measure of approval. Naturally, there are some slight points of difficulty, and I shall deal with them later.
The order is complex and technical, but its intention is to make the EJO more efficient and to speed up the making of orders and the obtaining of enforcement. The order will be followed by enforcement of judgment rules, which will fill in the details, since the order is only in a bare bones state. The final details of carrying out the procedure will be dealt with by rules, and these will come before the House as well. The result will be that the enforcement procedure will be simplified, and orders will be made with as little unnecessary work as humanly possible for practitioners, creditors and the EJO. Most important, it will see to it that justice is done both to the creditor, in seeing that he gets the money or order to which he is entitled as quickly as possible, and to the debtor, in seeing that he is treated as fairly as possible.
Having said that, I do not think that there would be much advantage, or that it would be the wish of the House, if I were to go through the 34 rather technical articles in detail. Perhaps I can confine myself to one or two of the main provisions, particularly those that have caused some difficulty.
The first provision with which I must deal is aimed at solving the problem of a litigant having to go to a court first and then to the office to enforce payment of a debt. The provisions of article 19 and schedule 3 allow the EJO to take enforcement proceedings in certain circumstances without prior judgment being obtained from a court. This will bring the procedure in Northern Ireland essentially into line with that which operates in England and Wales, where a default judgment can be followed immediately by enforcement, although usually through the same court as issued the writ or summons.
Under the new procedure, a creditor whose debt is for less than £300, and who feels that there is no defence to his

claim, will be able to go direct to the EJO without going to a court first, thus seeking enforcement straight away. If there is a dispute, in that a debtor on receipt of the application says that he is not liable, or the sum claimed is not agreed, the application will be dismissed and the creditor will have to go back to court to take proceedings. Incidentally, he will also have lost his application fee. There is, therefore, a positive safeguard against the abuse of the procedure by capricious creditors. I think that that is something about which the Law Society has been worried.
The proposals have given rise to considerable discussions with the Northern Ireland Law Society and with the Belfast Solicitors' Association. The solicitors were concerned that the procedure should provide adequate safeguards for the debtor, and also that the office should be able to cope with any additional work caused by this particular proposal. I have already indicated that there are real safeguards and that the order will not lead to abuse by creditors.
This procedure is similar to that which already obtains in England and Wales. However, in another place my noble and learned Friend agreed that the proposal should not be brought into operation until there have been further consultations and until he is satisfied that the office can adequately deal with any extra work load that may ensue as a result of this procedure. Further consultations will take place with solicitors, who will also be consulted about any rules that are necessary to bring about the procedure. I am sure that that will satisfy the legal profession, which has expressed its concern.
The other major new innovation is the introduction of a system of administration orders. Such a system was introduced for England and Wales by the County Courts Act 1959. It has been found to be a successful way of dealing with debtors who owe small sums of money to a large number of creditors. In no strict legal sense are these debtors bankrupt, and in any event it would be inappropriate and useless to seek a bankruptcy petition because they usually have no assets other than their weekly income.
An administration order allows a debtor to apply to the EJO, listing all his creditors. If an order is made, he simply makes one weekly or monthly payment


to the office, and the office distributes that sum pro rata among his creditors. It has considerable advantages for the debtor. There is a priority system in Northern Ireland which means that a debtor is normally pursued by only one creditor at a time. The priority is determined by the date of application to the EJO. That means that a debtor can be pursued successively by a large number of creditors for relatively small sums. For the creditor, especially in a multiple debt situation, this provision means regular small payments rather than his claim being deferred for a long time while others are paid first.
Further provisions in the order modify the Northern Ireland system of attachment of earnings. Again, this will bring the procedure into line with that operated in the remainder of the United Kingdom. When the present system was introduced, attachment of earnings was a new procedure and a large number of safeguards were built into the system. In Northern Ireland one of these was that such an order should not be made before the debtor had been given a chance to pay voluntarily through an instalment order. Only on default under that order could his earnings be attached. In practice, the debtor has had many opportunities of paying before an attachment of earnings order would be made. In many cases it was merely a lengthy method of deferring the inevitable. The debtor has shown by his previous conduct that he will not pay unless forced to do so.
Further opportunity for delay is not in the creditor's best interests or in the long-term best interests of the debtor. The attachment of earnings order procedure in Northern Ireland would be brought into line with the attachment of earnings procedure in England and Wales.
Other provisions in the order also simplify procedures. For instance, at present if one wishes in Northern Ireland to seize a debtor's goods—the procedure in England is known as a warrant of execution and in Northern Ireland as a seizure order—one has to list in the order the goods to be seized. That has disadvantages. The officer must attend and determine what goods are there and return to seize the goods. In England and Wales the bailiff simply makes a choice of the goods to seize when he attends the

debtor's premises, and much reliance is placed on the experience and expertise of the bailiff. The provisions of article 11 will change the situation in Northern Ireland so that the enforcement officer can exercise his discretion as to which goods to seize. There are provisions in both jurisdictions that prohibit the seizing of certain goods regarded as necessities.
The same article, in conjunction with article 7, introduces a procedure in Northern Ireland in a modified form which is in England and Wales known as walking possession. That is a form of deferred seizure, which is most effective in England and Wales. In effect, the enforcement officer at that time does not take the goods away from the debtor if the debtor promises to make regular payments. Default in payment results in the goods being immediately removed. An additional advantage of this procedure is that at present in Northern Ireland goods have to be removed in every case. The cost of removal and storage can be expensive and has to be paid for by the debtor.
Further provisions in the order modify the procedure for requiring a debtor to attend for examination on his means to shorten the steps necessary to ensure attendance. Other provisions increase the penalties on persons who make misrepresentations in trying to recover a debt.
Lastly, article 34 empowers the Northern Ireland Housing Executive, in common with other public bodies in Northern Ireland, to take magistrates' court proceedings for the recovery of money owing to it without employing a solicitor. That has again been criticised by the Northern Ireland Law Society. But it is only right that, where a public authority has been sufficiently diligent to set up a team of officials to recover arrears, it should be possible to employ them to appear on its behalf in court to recover the debt. A private individual can always appear without employing a solicitor if he so wishes.
I shall not trouble the House with further details. If hon. Members wish to question me about a particular article, I shall deal with that later. The main purpose of the order is clear. It will make the office more efficient. The rules that will subsequently be laid before the House will add to that process. I hope


that the order will have the blessing of the House.
I shall deal with the second order briefly. It remedies an oversight in the drafting of the Armed Forces Act 1971. The effect of the order is to amend provisions of the Services Acts which allow deductions from pay of members of the Armed Forces. It will bring within the scope of the Acts judgment debts that in Northern Ireland are enforceable by the EJO, and will make the position in Northern Ireland the same as in the remainder of the United Kingdom. I have pleasure in commending both orders to the House.

6.38 p.m.

Mr. William Craig: I appreciated the Parliamentary Secretary's remarks that were addressed to me at the start of his speech. I appreciated equally his lucid exposition of the order; it was most useful. But I cannot continue with that feeling of good will unless the Parliamentary Secretary can reassuringly explain what he means by the rules to be laid before the House. What opportunity will Parliament have to scrutinise the decisions of the rule-making authority? A negative resolution is not an adequate opportunity for Parliament to scrutinise a crucially important matter.
I am pleased with 90 per cent. of the order. It will greatly help the enforcement agency and answer many of the critics. But it is somewhat spoiled by the introduction of an article and a schedule alien to the concept of the enforcement agency. The agency was brought into existence to give effect to the decisions of the courts. It should remain just that and no more. The principle should be jealously guarded. I am nervous about interfering with a citizen's rights outside the normal judicial process without an exceptionally good reason. Article 19 and schedule 3 cannot be justified on the ground that it will facilitate and make more efficient the workings of the judgments enforcement office.
I want to spell out my objection to the change in public policy, and I shall do so as kindly as I can. It is another example of Parliament being treated almost with contempt when it comes to handling Northern Ireland affairs. Secondly, it is a good illustration of the inadequacies of direct rule and of legislating

by Orders in Council. Some hon. Members may say that they are tired of hearing about this defect, but it is always worth emphasising it. Hon. Members from other parts of the United Kingdom could well find that a precedent is being established in this instance which could rebound upon them very badly if other parts of the United Kingdom decided to follow Northern Ireland on enforcing court judgments.
We are doing too much here. We are not only establishing a semi-judicial—or indeed a judicial—function for the office. We are giving that office and its rule-making body virtually complete power to rewrite the will of Parliament. The Parliamentary Secretary said that this relates only to debts which do not exceed £300. That is so; but the rule-making body has complete freedom to vary that sum at will, regardless of what we in Parliament want. I do not think that that is a happy situation. We do not allow any court in the land to vary its jurisdiction in this arbitrary manner.
This rule-making body can do other things as well which perhaps we do not intend. It can allow the jurisdiction of the office to give priority to its own judgments over debt judgments by the courts. What justification is there for this provision? What justification can there be for debt judgments in favour of public bodies obtained under this new procedure taking priority for enforcement over private debt judgments?
I hope that the Parliamentary Secretary will not fall back on defending the position on the basis that these matters can be taken into account when the rules are made. Such matters should be firmly decided in Parliament. We should certainly not give sweeping authority to this admirable institution when we would not be prepared to do so for any other court in the land.
The Parliamentary Secretary should take note of this important psychological point. Take, for example, the case of the small shopkeeper in some remote area of Northern Ireland who receives a notice from the judgments enforcement office to say that a creditor has made a claim for payment of a bad debt. This claim requires the shopkeeper to present himself to the office or to indicate one way or the other whether he will meet that debt. If I know my people, I would say


that a considerable proportion of them would take that paper and dump it in the nearest waste paper basket. The office will then proceed to deal with the matter as an admitted debt, without even the protection of a formal hearing—something that we would not allow the courts to do in matters such as hire purchase. There are no such safeguards here as there are in our consumer legislation. The probability is that in many cases, because of ignorance of the legal position, judgment will be given in respect of a debt which should not be given.
In our courts an undefended action is most rigorously tested by the bench. It must be proved strictly, and the bench frequently acts as the devil's advocate. In this case the office will virtually rubber stamp the debt without a formal hearing. That is not satisfactory.
If we do not have this procedure, a summons to appear before a court will arrive at the home of the unfortunate shopkeeper. He will not turf that into waste paper basket as he did the notice. He will suddenly realise that he must appear before a court of the land to answer the charge of a debt. There is less risk of his case going by default in those circumstances.
Can the Parliamentary Secretary tell me why he believes there is such an advantage in encumbering the judgments office with these new procedures, particularly when the new Judicature (Northern Ireland) Act is being implemented and circuit registrars will be empowered to deal with many small cases? It is an unnecessary duplication of a facility available to the community at large. I believe that this duplication will be made at the expense of the efficiency of the judgments enforcement office. We should guard jealously that office's efficiency.
I appeal to the Parliamentary Secretary to have second thoughts on this matter. None of us wants to hinder progress on this order because there is a great deal of good in it, but we cannot overlook the points that I have made or the persistent and consistent opposition expressed to this provision. The Law Society has been very concerned from the outset. While supporting the order generally, it believes that this provision should be dropped. The Belfast solicitors have said the same thing. A year ago my right hon. and hon. Friends said quite firmly that

this was a most undesirable provision. At that time we were assured by the Lord Chancellor's office that discussions would be held with interested parties and that it was hoped that an agreement along the lines that we suggested might be reached. Unhappily that has not occurred.
Why have we been presented with an order containing such sweeping powers? Paragraph 11 of schedule 3 gives the rule-making body the right to decide that none of schedule 3—or at least none of the first 11 paragraphs—need be implemented if that body does not wish them to be. It is very strange that, after Parliament has decided something, this rule-making body should be allowed to say it will not implement it. Nevertheless, it suits my purpose to suggest that this extensive power might be used to assure us that the rule-making body will not seek to implement article 19 and schedule 3. I would feel much easier in supporting this order if the Parliamentary Secretary would say that the rule-making body would be guided accordingly. Otherwise, we shall have to look at the whole matter again, even if it means a negative resolution to defeat it. There is strong feeling on the subject.
I shall not labour the point but I am jealous of the power to ensure that citizens' rights are adequately protected in the courts and elsewhere. I do not think that we can give anyone, no matter how eminent, such sweeping powers.
I should like to mention briefly the question of allowing statutory or public bodies to be represented in the new procedures by an official who does not possess legal qualifications. I do not feel strongly about this, but I know that many in the legal profession are deeply concerned—and not, as some quickly pointed out, in their own selfish interests. The Parliamentary Secretary knows that when a solicitor appears before a court he has an obligation to look after the interests not only of his client but of the court. The discipline within the profession ensures that the obligation is seriously undertaken and that is vital and necessary for the efficient working of our judicial institution. An official without legal qualifications is under no such obligation—indeed, he may lack the knowledge to discharge it adequately.
I see no good reason why the bodies cannot have a legal department within


their own organisation. I do not suggest that they should have to employ a solicitor, but they could, if they so wished, employ qualified staff in their own legal departments. I ask the Parliamentary Secretary to give further thought to the matter. However, I hope that it will become academic and that my earlier appeal will be listened to and that the office will not be asked to perform judicial functions.
I have been asked to make a comment in a completely different tone. Since the Lord Chancellor's office has become responsible for the Enforcement of Judgments Office, I have heard nothing but praise for its handling of affairs and the extent of consultations. Perhaps representations are not always listened to, but the climate is good and the opinion of the Lord Chancellor's office is indeed high. I hope that that comment will be conveyed to the proper quarters.

6.53 p.m.

Mr. Philip Goodhart: The Opposition share the view of the Northern Ireland Law Society and the Belfast Solicitors' Association and that put forward with such force by the right hon. Member for Belfast, East (Mr. Craig) that article 19 and schedule 3 of the draft order raise an important point of principle. The right hon. Gentleman reminded us that the provisions will allow the Enforcement of Judgments Office to enforce certain debts without the prior judgment of the court.
The Northern Ireland Law Society and the Belfast Solicitors' Association would like an unambiguous assurance from the Government that there will be the fullest consultation with the Lord Chancellor's office in Northern Ireland before the measures are implemented. The Parliamentary Secretary reminded us that on 15 February, in another place, the Lord Chancellor gave an assurance that he will not seek to bring the provision into operation until there have been further consultations with the users of the EJO—including the Law Society. However, the Northern Ireland Law Society is still apprehensive. No doubt that is because there was an uncharacteristic lack of consultation at an early stage. I hope that when replying the Parliamentary Secretary will go further than he did in introducing the draft order.
When the Minister introduced the payment of debt order last year he painted a depressing picture of debts in Northern Ireland. He told us that since 1975 debts for rent, rates, gas and electricity had increased from £28 million to £40 million. He told us that the rent debt had continued to increase but that electricity and gas debts had grown still faster. In opening the debate today, the Parliamentary Secretary told us that the EJO had dealt in the past year with more than 5,000 cases of debt. I should like to ask the Minister whether the overall position has changed since June of last year when the draft order was introduced. At that time, the Minister told us that the proportion of debtors to tenants in Northern Ireland was one to five.
Article 34 of the draft order makes it simpler for the Housing Executive to try to recover some of the debts. In another place the Lord Chancellor seemed to suggest that the process of trying to recover outstanding rent payments might now be speeded up. I should be grateful if the Minister would tell us whether the Government intend to increase their effort to reduce the volume of outstanding rent debts. The issue is one of substantial importance, because once debts to public authorities grow to the size that they had in Northern Ireland there are substantial consequences for the social life of the community.
The disease is highly infectious. Throughout the United Kingdom it is all too easy to say "If so many people are not paying their bills, why should I?" The failure on the part of the Government to collect the debt would be monstrously unfair to the poorest citizens of Northern Ireland who pay their bills fully and promptly.

6.58 p.m.

Mr. Arthur Davidson: My right hon. Friend the Minister of State, Northern Ireland Office will deal with the points raised by the hon. Member for Beckenham (Mr. Goodhart). I should like to refer to some of the comments of the right hon. Member for Belfast, East (Mr. Craig). I am grateful for his kind remarks about my noble Friend the Lord Chancellor and I should tell the right hon. Gentleman that the possible rules of which he has been critical will be made by my noble Friend the Lord


Chancellor, as are rules of court in England and Wales. They will be laid before the House and will be subject to the negative resolution procedure, as are the rules of court for England, Wales and Scotland. The right hon. Member for Belfast, East indicated the office and knows intimately how it works, but I think that he is being unnecessarily worried about the rules, their effect and the opportunity for hon. Members to pray against the rules if they do not approve of them.
Article 19 is clearly the article which has given most cause for concern to the Law Society and hon. Members. The order will introduce a system under which a creditor may make application direct to the office if a debt is for Jess than £300 and if there is unlikely to be any defence by the debtor. If there is a defence, the application will be struck out and the creditor will have to proceed in a county court in the normal way. If the debtor does not object, the creditor will proceed to enforcement.
The safeguards of the system are that a simple objection by the debtor will result in the application being dismissed, and the rules will also provide a procedure allowing the debtor to apply for the order to be set aside if he claims that he has not received notice.
I repeat that the procedure will bring Northern Ireland into line with England and Wales. The default procedure in a county court and the High Court in England and Wales is a well-known procedure which has operated for many years

and has not been subjected to abuse or objection. Bearing in mind that the master of the office is a judicial officer ranking just below a judge, I am sure that the right hon. Member for Belfast, East will agree that the master and his expert staff will ensure that the new procedure is effective and is not abused.
I appreciate the right hon. Gentleman's concern, but he was a little unfair to the prestige of the office which he set up. Most people going before the office or receiving a summons from it realise that it is held in high respect and regard and that its orders ought to be adhered to. Most of those who would attend on a summons in the courts would also attend on a summons from the office.
My noble Friend the Lord Chancellor will continue his consultations with the Belfast solicitors and the Law Society in Northern Ireland. Only when he is satisfied that the procedure can be properly put into effect by the office will he introduce it into the House. I hope that what I have said will go at least some way towards allaying the fears of the right hon. Member for Belfast, East.

Question put and agreed to.

Resolved,
That the draft Judgments Enforcement and Debts Recovery (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved.

Resolved,
That the draft Judgments Enforcement (Consequential Provisions) (Northern Ireland) Order 1979, which was laid before this House on 17 January, be approved.—[Mr. Arthur Davidson.]

Oral Answers to Questions — EUROPEAN COMMUNITIES (BUDGET)

7.5 p.m.

The Minister of State, Treasury (Mr. Denzil Davies): I beg to move,
That this House takes note of EEC Documents Nos. R/3185/78 R/3089/78, R/3090/78, R/3093/78, R/3146/78, R/3312/78 and 4102/79 on the Communities' Budget.

Mr. Deputy Speaker (Sir Myer Galpern): I should inform the House that Mr. Speaker has selected the amendment in the name of the hon. Member for Southampton, Test (Mr. Gould).

Mr. Davies: The Government welcome the opportunity to debate the Commission document "Financing the Community Budget—The Way Ahead", R/3185/78, together with four budget transfer documents and two other documents embodying an issue of principle on the operation of the budget.
The present and future arrangements for financing the activities of the Community are matters of growing concern for all member States. They are an issue of immediate importance for the British Government. The Commission paper on financing the budget is a valuable basis for discussion.
In this connection, I should like first to clarify the status of the Commission document. It has been presented by the Commission on its own authority as a discussion document—a Green Paper. Its purpose is to enable Governments to take a first look at the available options should the revenues provided by the existing own resources system prove insufficient in the future to finance the Community's agreed level of expenditure. The document does not present formal proposals and, therefore, Governments are not being asked at this stage to take firm policy decisions.
The paper will first be discussed at ministerial level in the Joint Foreign Affairs and Finance Council in April. We fully expect that, when Governments have had the chance for a thorough exchange of views on the main issues in the paper, the Commission will be asked to put forward a set of firm policy proposals. The proposals will be deposited in the House in the usual way and hon. Members will have an opportunity to debate them. Meanwhile, the Government will obviously pay close attention to the views

expressed by hon. Members in this debate.
Hon. Members may find it useful in considering the paper if I briefly outline the way that the existing own resources system operates. The revenue side of the budget is financed from three sources: agricultural levies, Customs duties and a third element comprising the yield from a variable VAT rate of up to 1 per cent. calculated on a harmonised base for all member States.
In the 1978 budget, for example, agricultural levies took up 15·5 per cent., customs duties 45·9 per cent. and the third element, which was related to our GNP share in 1978, took up 38·6 per cent. of the United Kingdom's gross contribution. That gives an indication of the mix of the three ways of raising money within the EEC budget in relation to this country.
For 1979 the third element for three of the member States—Germany, Ireland and Luxembourg—will be related to their shares of Community GNP since those countries have not yet implemented the VAT sixth directive. Naturally the size of the third element, and hence the notional VAT rate, will vary according to the gap between the revenues provided by the agricultural levies and customs duties on the one hand and the level of expenditure agreed in the Community budget on the other hand.
An important feature of the present system is that under the own resources decision of 21 April 1970, a ceiling of 1 per cent. was placed on the VAT rate. The own resources decision cannot be altered except by a unanimous decision of the Council of Ministers and an amendment that must be ratified by the Parliaments of all member States. In other words, should the 1 per cent. ceiling be reached, a new source of revenue cannot be adopted without the agreement of all member Governments and the approval of all member countries' Parliaments.
That brings me to one of the central points in the Commission paper. The Commission would concede that any assessment of the date when the 1 per cent. ceiling will be reached depends upon a number of assumptions. In particular, the assessment depends upon an estimate of the revenues which will continue to be generated by the existing own resources


system. Secondly, and more importantly, the assessment hinges upon how the future trend of expenditure develops.
The Commission says in its document that it does not believe in the budget expanding for its own sake. It also says that present and future policies must be judged against the need for restraint in public expenditure. The question, however, needs to be taken much further.
The present arrangements for financing the budget are badly out of kilter. They bear no discernible relation to the ability of countries to pay. On the contrary, their effect is random and, for the United Kingdom, downright perverse. But this is not a problem for one country alone. It is an issue which the Community as a whole must tackle in its own long-term interest. It is essential for the future of the Community that its policies taken as a whole should reflect an overall balance which corresponds to the Community's long-term objectives and which is broadly acceptable to all member States.
This is manifestly not the case for the United Kingdom's budget contribution at present. Our level of net payments is out of all proportion to our relative prosperity. The burden is growing every year. If it continues unabated, it will have an increasingly adverse effect upon our balance of payments despite the corrective supplied by the financial mechanism. It represents a very considerable resource cost to the British Government and people.

Mr. Nigel Lawson: The right hon. Gentleman mentioned the corrective mechanism. As I understand the corrective mechanism, if the total contributions reach 110 per cent. of the proportion of the GDP, an adjustment is made.
I have a written answer from the Chief Secretary to the Treasury saying that in 1979 it was expected that our contributions would reach the 110 per cent. mark. Does the Minister of State expect in 1979 the adjustment mechanism to come into play for the first time?

Mr. Davies: It is slightly more complicated than just 110 per cent. But I accept the hon. Gentleman's point. We expect that in 1979, as a result of the position in 1979, there will be some adjustment and payment to be made. In

fact, that payment will be made in 1980. What exactly it will be is not easy to tell at the moment.
Clearly one of the keys to this problem relating to the budget is finding ways of curbing the present excessive level of expenditure on the common agricultural policy. This swallows more than 70 per cent. of the budget and mainly benefits richer member countries. A major objective of this Government is to put an end to the structural surpluses which account for the major share of spending and to bring some rationality into the pricing arrangements which are badly out of line with world markets. We are pursuing, and will continue to pursue, this objective irrespective of progress on any new own resources. But the scale and timing when existing own resources are exhausted will depend to a significant degree on the trend of agricultural expenditure.
Balancing all the revenue and expenditure variables, the Commission estimates in its paper that the ceiling on own resources will be reached by the time of the 1982 budget and that a decision on a new revenue source will be needed this year to allow time for ratification. This estimate allows for the enlargement of the Community. We have not yet been given all the detailed calculations underlying the Commission's estimate. No doubt we shall get a clearer picture in the course of discussion.
Having discussed the need for a new revenue source, the Commission goes on to make a preliminary examination of a number of possible options. With the House's permission I will comment on these briefly. The first solution suggested by the Commission would be to raise the 1 per cent. ceiling on the VAT rate. The Commission says that this would have the virtue of simplicity. VAT is already an accepted own resource, and a harmonised base has been agreed in principle.
The other options examined are taxes on cigarettes, alcohol and energy and additional personal and corporation taxes. All of these would pose practical difficulties, notably the absence in most cases of an agreed harmonised base for them. Furthermore, they would have a regressive effect for some countries, including the United Kingdom. The Commission also considers the option of borrowing to


finance a budget deficit only to reject the idea.
We shall be discussing these technical questions in detail with other Governments and with the Commission in the coming months. At this stage, I can say that the Commission's general approach to the various options seems broadly sensible, though there are a number of points of detail which we will need to look at very carefully.
Hon. Members will have noted that the Commission draws attention in its paper to the idea that any new revenue source could be looked at from the standpoint that it should not exacerbate existing economic disparities, known as the principle of non-regressivity, or that it should help to reduce these disparities, known as the principle of progressivity. The principle of progressivity is the familiar one applied to personal taxation. The higher the income bracket, the more sharply the level of taxation rises. There is no reason why this principle should not be applied for calculating contributions to own resources, either new own resources or even existing VAT own resources. For example, if a degree of progressivity of 1·5 were applied, using GNP per head as the criterion of prosperity, a country with a GNP per head of 10 per cent. below the average would on that basis pay 15 per cent. less than the average.
This is clearly an important issue, and the Commission is to be congratulated on placing the idea of introducing progressivity before member Governments. Introduction of the principle of progressivity would be a significant step forward on the road towards bringing the level of contributions to the budget properly into line with the ability of countries to pay. Some of the more prosperous countries may regard the idea of progressivity with less enthusiasm than others.
I turn now to the four budget documents which the Select Committee has recommended for debate R/3089/78, R/3090/78, R/3093/78 and R/3146/78. Each of these documents concerns a proposal by the Commission to transfer appropriations from one section of the 1978 Community budget to another. When the 1978 budget was adopted, there had been no Council policy decision in any

of the areas covered by the four documents. The appropriations relating to them were therefore included in the reserve section of the budget, which is chapter 100. Appropriations entered in chapter 100 have a provisional character and cannot be used until they are transferred to the operational part of the budget—that is, the individual chapters, articles or items, as the case may be—where expenditure can be incurred and commitments entered into in pursuance of agreed Community policies. In the absence of Council policy agreement in these areas, the inclusion of provision only in chapter 100 was therefore consistent with the Council's views, which We strongly support, that expenditure should not be incurred without Council approval of the underlying policy.
In these four documents, the Commission proposed that the appropriations originally included in chapter 100 should now be transferred to the relevant operational line in the 1978 budget One of the documents, R/3093/78, relates to budgetary provision for the Joint European Torus, the JET project. In this case, the Council took the necessary policy decision on 30 May last year, so there was no objection to the relevant appropriations being tranferred on to the line. The Council, therefore, unanimously supported the Commission's proposal in R/3093/78. In respect of that document, no point of principle arises.
In the other three cases, as the Select Committee has pointed out, there had not been similar policy decisions. Nevertheless, the Commission wanted to ensure that the appropriations entered in chapter 100 of the 1978 budget for these items would remain available for use in 1979 in the event of a requisite policy decision being taken by the Council. However, since there is some doubt as to whether appropriations entered in chapter 100 could legally be carried forward in this way, the Commission decided that it had no alternative but to seek first a transfer to the operational line, whence a carryforward to the 1979 budget would be possible.
When the Council discussed these transfer proposals it took the view that, since the necessary policy decisions neither existed nor were imminent, there was no need for the transfers. In these cases, however, the Council's opinion is only


advisory, since the proposals all relate to non-obligatory expenditure.
The Assembly has the last word, as the House knows, on annual appropriations for non-obligatory expenditure, subject to the overall limitation imposed by the maximum rate. This power extends to transfers relating to non-obligatory expenditure, and, in exercise of this power, the Assembly, noting the Council's opinion on the proposals, announced that all four transfers were authorised in any case.

Mr. John Roper: When this is done in such a way as to carry forward from one year to the other, does the increase in expenditure count against the maximum increase in expenditure that can take place in the following year?

Mr. Davies: Yes, it does. In fact, the maximum rate applies now both to appropriations and to actual payments. As I understand it, it counts against the maximum rate. Although this means that in three cases appropriations now exist on the line against the Council's wishes, the significance of this should not be overstated. The Commission's intention in making the proposals was not to defy the Council but to ensure that the appropriations would remain available for use in 1979 should the need arise. In fact, in the case of one of these documents, R/3146/78, concerning projects in the field of technology and industry, the Commission has subsequently decided to withdraw its original proposals for a Council decision, so there seems little prospect of any expenditure being incurred against the Council's wishes.
The remaining two documents in this batch of four relating to the carry-forward to the reserve item, R/3089/78 and R/3090/78 concern, respectively, expenditure on helicopter and airframe research programmes and joint projects in prospecting for hydrocarbons. Council policy agreement in these areas still seems unlikely in the near future and my understanding is that, in the absence of such agreement, the Commission has no intention of utilising the appropriations released from chapter 100. Thus, in practice, the Council's view that expenditure in these areas is precluded by the absence of an agreed Council policy should still be respected. As a result, the Council's

authority will be maintained and the institutional balance will remain unchanged.
The remaining two documents before the House, R/3312/78 and 4102/79, also raise a point of budgetary principle though this time one in which the Council is in a strong position and need not leave the last word to the Assembly.
Briefly, the background is this. Research related to the development of nuclear energy has always been a significant activity under the Euratom treaty, and since 1974 there has also been a growing amount of activity in other fields carried out in support of the objectives of the Economic Community. Under both treaties it is only possible to undertake research and development programmes when the Council agrees unanimously to do so, and so each programme is the subject of a Council decision in which the Council lays down the scientific and technical content, the duration—usually four or five years—and the way in which the programme is to be carried out. The scientific definition of the programme would be incomplete without a statement of the Community resources to be used. It is these resource provisions in two, as yet, unadopted research proposals that are amended by the documents before the House.
Because Community expenditure on research and development is classified as non-obligatory, the budgetary procedure again gives the Assembly the last word over the annual appropriations entered in the budget. But research and development expenditure is treated specially. In particular, appropriations receive special treatment in the Community's financial regulations.
Article 88 of the financial regulation of 21 December 1977 allows the Council to set an overall ceiling, or tranche, to the total Community funds to be allocated to a multi-annual programme in the course of its lifetime. Although the Assembly can influence the pattern of appropriations year by year, it is not able to override the overall ceiling set by the Council.
The Assembly has tried to circumvent this limitation on its powers by proposing amendments to draft Council decisions, worded so that no firm ceiling would be set. However, even when, as in the present cases, the Commission itself amends its own proposals in line with


the Assembly's recommendations, the Council's ultimate control over the adoption of research and development programmes enables it to word its decisions as it wishes and to set firm financial ceilings.
If these amendments were adopted, the Council would in effect have waived its rights under article 88 of the financial regulation and given the Assembly influence over total as well as annual expenditure.
In the past, the Council has invariably rejected such Assembly amendments, and has normally set firm expenditure ceilings in multi-annual research programmes. The United Kingdom has supported such action by the Council and I can assure the House that it will continue to take the same line on these and similar proposals.
I do not know why the hon. Member for Blaby (Mr. Lawson) is laughing. This is an important point—the balance between the powers of the Council and those of Parliament. We believe very strongly that the Council should exercise its right to set financial ceilings and, therefore, intend to ensure that this right is preserved in future Council decisions on research and development matters.
Having dealt with these rather technical but nevertheless important budget points, I should like finally to return briefly to the Commission paper on the provision of new own resources. Perhaps I may also say at this stage, Mr. Deputy Speaker, that the amendment which you have said is selected for debate is one which the Government can accept because it presses for improvements in the operation of the budget to bring net contributions of member States, and particularly of the United Kingdom, into line with their ability to pay. Improvement in the level of net contributions depends on both gross contributions and receipts. We shall therefore maintain our policy of seeking a reduction in the total cost of the CAP and a more rational distribution of resources between agricultural and non-agricultural programmes.
We shall continue to insist upon a real improvement in the way in which the burden for financing the Community budget is shared out among member States. We shall take an active part in

the discussions on the Commission paper at the April Joint Foreign Affairs and Finance Council meeting. May I once again assure hon. Members that we shall pay close attention to the views expressed in the debate this evening and that when the Commission comes forward with firm proposals the House will have an opportunity to debate them.

7.28 p.m.

Mr. Nigel Lawson: The Minister of State began with the document "Financing the Community Budget—the Way Ahead", the first of the seven or eight documents we have to debate, and he ended with it. I share his view that this is a document of the first importance, so much so that because this debate is of a strictly limited time I shall not discuss what he called the more technical documents which are also before the House. The Minister rightly said that their significance should not be overstated.
I shall devote myself entirely to the extremely important document "Financing the Community Budget—the Way Ahead". The document raises issues of the first importance even though it is only a consultative document, only a Green Paper. It is right that we should be aware of the great importance of the issues raised in this document which go to the heart of matters traditional to this House of Commons. Here we have the European Community asking the taxpayer for more money.
That is something we should consider very carefully. I thought that in some places the Minister of State was a little flippant in his discussion of this document, but I did not find much with which I dissented in the content of his speech. Whether we are pro-Europeans or anti-Europeans—I unhesitatingly declare myself a pro-European—this is something which, as parliamentarians, we must subject to the most searching scrutiny. As the Minister said, this document is a Green Paper. The Commission is inviting our views, and we should give them.
Before giving the views of Her Majesty's Opposition, I must say that this debate could not have come at a more curiously appropriate time. When discussing the minor documents, the Minister made great play with the Community budget of 1978. I was surprised that he did not refer to the budget of 1979. I


was perhaps discourteous enough to laugh when he was talking sententiously about the balance of power between the Council of Ministers and the European Assembly. He asked why I laughed when this was a serious matter. I laughed because the real challenge between these two came in the context of the budget of 1979—which the Minister did not mention at all. That seems very strange.
The Community has for the first time no agreed budget for the coming year—1979—and it is instructive to recall how this came about. The European Assembly added to the budget an extra £325 million of regional expenditure, confident that the Council of Finance Ministers when it met on 20 November last would vote that down, after which there would be the usual horse-trading between the Council and the Assembly, leading to the usual compromise. But, to the general astonishment, on 20 November it was not voted down. By some almightly muddle and incompetence, the representative of Her Majesty's Government at that meeting—the Chief Secretary, no less—cast the decisive vote in favour of the enlarged budget.
It is surprising that the Minister of State made no reference to that important event, particularly since he was discussing the delicate question of the balance of power between the Council of Ministers and the Assembly. I know that he is a junior Minister at the Treasury and that the Chief Secretary is in the Cabinet, but he is not such a weak or timorous soul that he might not have adverted to it, I should have thought. But I was wrong.
Since then the Government have recognised their blunder and have now gone to the opposite extreme of refusing to pay their contribution to the budget, which is almost certainly an illegal act.

Mr. Denzil Davies: The Government are paying their contribution according to the draft budget. They have not refused to pay their contribution.

Mr. Lawson: That is a technicality. They are not paying their contribution according to the budget which the Chief Secretary himself allowed to pass through the Council of Ministers. This is the important point. This is almost certainly illegal. If the Minister of State wishes it to be tested in the courts, it can be so tested. Perhaps it will be, but I hope that a compromise will be reached.
The Minister can decide no more than I where the legality lies, but we can both admit, I am sure, that the balance of legal opinion is that what Her Majesty's Government have done to redress their earlier blunder is illegal. Perhaps the Minister can enlighten the House by explaining what he expects to happen next in this chapter of the unfolding saga of Britain in Europe.
In the meantime, in the last months before the transmogrification of direct elections, the European Assembly might pause to consider what its budgetary function chiefly is. Is it to act as a necessary watchdog against excessive or unwise expenditure, or is it the reverse, to demonstrate its virility by boosting Community public spending?
It is against that background that we should examine this important document. It raises three separate questions. The first is whether the Community needs more money than will automatically come to it from the agricultural levies, the Customs duties and the 1 per cent. VAT, and whether it needs it, as it claims in this document, by 1982.
The second question is, if it does need more money to finance a bigger budget, should the extra spending be in substitution for public spending now conducted at the national level or should it be net additional public spending? The third question, on which the Minister of State rightly touched, is, if more money is needed, for whatever reasons, how should that money be raised?
The amendment is confined to the third consideration, in effect. We have no particular objection to it, even though its wording leaves something to be desired, because the present pattern of Community revenue and expenditure is cockeyed and unsatisfactory to Britain and needs to be changed.
On the expenditure side, the clear need, as is generally agreed, is to reduce expenditure on the common agricultural policy, which at present takes almost three-quarters of the total budget. That must be done. The alternative, the soft option, is to try to swamp the effect of CAP spending by massive spending in other fields in which the United Kingdom might expect to be a net beneficiary. I believe that it was this view which led the Chief Secretary to cast his unwise


vote on 20 November. That view is unacceptable to us on public expenditure and taxation grounds alike.
Let us consider, for example, regional fund spending, from which the United Kingdom would indeed be a net beneficiary and which was very much the matter in dispute on 20 November. So far as this is additional spending, the hard-pressed British taxpayer would still have to contribute £75 of extra taxation for every £100 of extra public expenditure received on the basis of the formula at present current in the Community.

Mr. Nick Budgen: Does my hon. Friend agree that the way in which Community negotiations are conducted means that if, for the sake of argument, a nation State gets a benefit of £25 per head of extra public expenditure, it loses it on some other deal and, for instance, has to consent to the co-responsibility levy on excess production of milk? So there is no way in which one can get a benefit without paying for it.

Mr. Lawson: I think that my hon. Friend is on to a bad point, because some countries get great benefits from the CAP and do not have to pay for those benefits themselves.
I turn now to the revenue side of the equation. Here, the inequity stems not from the CAP but essentially from the fact that, as a large importer of non-agricultural goods from the outside world, we pay far more than our fair share to the Community purse by way of customs duties. To be precise, with 16 per cent. of Community GNP, we contribute 25 per cent.—or, this year, about £800 million—of total EEC revenues from customs duties.
It seems to me that if the Community is to acquire a new source of revenue—say, by an increase in the VAT limit from 1 per cent., which at present applies a limit for the United Kingdom of about £1,000 million, to 2 per cent. or whatever is chosen—a simple mechanism should be devised whereby we are automatically credited with the excess payment of customs duty above the amount which would be strictly proportionate to our share of GNP.
That would be a far better way of achieving equity than the so-called

"progressivity" which appeared to commend itself to the Minister and with which the Commission toyed in its document. However, I must say that the Commission's insistence that any new source of revenue should not itself be regressive is at least a welcome advance.
But the key question is whether the Community should be given a new source of money at all. The Commission's Green Paper suggests four reasons why it should. There is the cost of enlargement—the accession of Greece. Portugal and Spain. We on the Conservative Benches welcome the prospective enlargement of the Community. At this stage it is impossible to quantify the cost. There may well be some cost, but a great deal will depend upon the future of the common agricultural policy.
There is also the alleged lack of buoyancy of the existing sources of revenue. The Commission seems here slightly to overstate its case. Between 1975 and 1979, for example, total Community revenues from agricultural levies and customs duties combined rose by 67 per cent., against a rise in total Community GDP of 54 per cent. Whether there is buoyancy depends on a lot of assumptions about the future which may or may not be borne out.
The two main arguments in the document, however, do not rest on the enlargement of the Community or the lack of buoyancy of existing sources of revenue. Instead they are, first, the need, as the Commission sees it, to transfer to the European plane public expenditure at present conducted at a national level and, secondly, the need to increase the totality of public expenditure within the countries of the Community. The document is explicit on this second point. Paragraph 16 of the document says:
 over the years the development of actions at the Community level should substantially increase the size of the budget. In some critical areas this would necessarily involve an increase in the total of public expenditure, as Community actions would be additional to national actions.
As to the first of those proposals by the Commission, the idea of transferring from the national plane to the European plane certain items of public expenditure, this type of switch is something that we would be inclined to respond to by treating each proposal on its merits. It is difficult to see a large number of such


areas, although no doubt a case could be made, for example, in the context of regional spending, in so far as there is such spending, to avoid the bidding-up of subsidies, which might occur if things are left to individual member States. However, the Commission at this stage makes no specific proposals as to which items of public expenditure ought to be transferred from the national to the European plane. We shall have to wait and see what eventually is proposed before making a judgment.

Mr. Alan Clark: My hon. Friend is too tactful in concealing his feelings. Is it not the case that these proposals are simply part of a prolonged attempt to aggrandise the powers of the Community so as to bring within its clutches more and more comprehensive powers of a general kind without limit—as it sees it—until it will finally bring within its scope all forms of taxation and distribution of money?

Mr. Lawson: There are many different groups and forces within the European Community which have different motives. There may be some which have that view. It is a little far-fetched to say that that is the view of the Community as a whole. I cannot think offhand of a single member country which would support such a view.
The more important matter, however, relates to the second heading, namely, an increase in the totality of public expenditure and the demand for extra revenue for that purpose—

Mr. R. C. Mitchell: Did I understand the hon. Gentleman to say that the increase in the budget proposed by the European Assembly was unacceptable to the Opposition on public expenditure grounds, even though it means a substantial benefit for Britain through the regional fund? If that is so, why was it that the whole of the Conservative delegation in Europe voted in favour of this move, as I did? I am proud to have done so. I believe that the Government are being stupid on the issue. Can the hon. Gentleman explain?

Mr. Lawson: I departed some time ago from the 1979 budget debacle. I had returned to the document. If the hon. Member wishes me to do so, I shall return

to his point. The Conservative Members who voted as he did—the Labour Members, as I understand it, were divided on this matter, as they are on most matters—were expecting, as I said, that the Council of Ministers would, as it had always done in the past, vote the budget down—

Mr. R. C. Mitchell: No. After that.

Mr. Lawson: —and then there would be the process of horse trading. Then the Chief Secretary behaved in this curious way on 20 November, which the Government have been regretting ever since.
I return to the more important point, namely, the claim in this important document, a valuable contribution to discussion—I see the Minister of State smirking when I recall his own words—that public expenditure in its totality should be substantially increased and that extra revenue should be raised for this purpose. We clearly cannot either welcome or approve that proposition at a time when the overriding need is to cut taxation and reduce the burden of public expenditure. We cannot accept any suggestion that the European Community, at this time or prospectively, should be voted funds to enable it to add further to the totality of public expenditure.
To fire this gentle warning shot at this stage is in no sense to be anti-European. The progress of the European adventure is not to be measured by the size of the Community budget. There is a great deal to be done, even in the narrow financial area, of a non-budgetary nature. For example, there is the removal of exchange control within the EEC to be dealt with. Nor, incidentally, will it necessarily encourage the essential reining back of CAP spending if we are to make more funds available to the Community with no strings attached.
The heart of the matter is rather that for too long it has been believed—particularly in the Labour Party and its counterparts overseas—that the solution to any problem was to throw public money at it. The result at national level, as is generally recognised, has been little short of disastrous. It will be no less disastrous if it is the EEC which is throwing the money, albeit on a smaller but by no means insignificant scale. Before the Commission makes a formal proposal on this matter—which it will do in due course—having, I hope, listened


to what we have said, I trust that the voice of the European taxpayer, who is just as European as anyone else, will be more clearly heard than is evident in the document before the House today.

7.49 p.m.

Mr. Bryan Gould: I beg to move, at the end of the Question, to add:
' but notes the regressive and inequitable operation of the present system of financing the Community Budget and urges Her Majesty's Government, in negotiating on any Commission proposals, to press for a system of financing the Budget which contributes to reducing the present disparities and to bringing the level of net national contributions into line with ability to pay.'
I am happy to have the opportunity to move the amendment, which stands in the names of my right hon. and hon. Friends and myself—

Mr. Neil Marten: Hear, hear.

Mr. Gould: —and that of the hon. Member for Banbury (Mr. Marten). Both Front Bench spokesmen have correctly, in my view, identified document No. R/3185 as by far the most important of the documents which we have to consider tonight. As has been said already, this document sets out the problems which the Commission foresees as arising out of the situation when the budget will have outgrown the own resources—the levies, the duties and the yield from up to 1 per cent. VAT—which those resources can match.
It seems to me that there is a preliminary question, however, to which both Front Bench spokesmen have already adverted, namely, that the size of the budget, or, rather, the financing of the budget, is not just a question of finding money to meet whatever obligations are undertaken. The first question is what can be done about limiting the size of the budget—the total outline of expenditure.
The Commission pays lip service to that and makes one or two cursory remarks about it, but it is clear that the Commission has a vested interest. For the sorts of reasons mentioned by the hon. Member for Plymouth, Sutton (Mr. Clark) in an intervention, the Commission has a vested interest in seeing a continuing growth in the size of the EEC budget, because all that that means is that resources

are shifted from a national level to a supranational level, and we thereby, bit by bit, find that we are being governed at that supranational level.
There is no solution to the problem of the size of the budget unless we tackle the problem of the common agricultural policy. It has been made clear already today, as on so many previous occasions, that the CAP accounts for over 70 per cent. of the total expenditure. This entails that an enormous burden in the budgetary context actually rests on the shoulders of my right hon. Friend the Minister of Agriculture, Fisheries and Food. It is he who is tackling the problem, it is he who is trying to hold down prices, and when we hear the encouraging words from the Opposition Front Bench and we know that my right hon. Friend will need every ounce of support which he can garner both in the House and in the country, we shall wish to examine and test the genuineness of what has been said tonight to see whether the Opposition will support him in the struggle which he is undertaking.
But it is more than just a question of holding down prices, since even if we were to hold down prices that would simply leave the budget intact and growing with inflation. What we need to tackle is the whole principle of intervention, and that has to be done before enlargement, because once the Commun is enlarged, with the same principles applied to Mediterranean produce as are applied currently to temperate produce, the game is lost. There is then no limit to the budget. It will grow to the extent that it will bankrupt us all. So my right hon. Friend needs support, and he needs support from the Conservative Opposition as well as from the people of this country. Fortunately, he is far more guaranteed of support from the people than from the Conservative Opposition.

Mr. Douglas Hurd: I am trying to follow the hon. Gentleman's argument. He is saying that it is the Commission which is always pushing for more spending and his right hon. Friend is now pushing for less. How does he explain that it is in fact the Commission which this year, as last, has taken the initiative in the agricultural price review? It is the Commission, not the Minister of Agriculture, which is taking the initiative in trying to freeze prices.

Mr. Gould: I had laboured under the illusion that the argument which I was developing was quite straightforward, so I cannot really imagine that it taxed the hon. Gentleman as much as he suggests. Of course, the Commission is as susceptible to the growing political pressure and growing dissatisfaction with the current shape of the budget as is anybody else. If the hon. Gentleman will be patient for a moment, we shall shortly see that there are other possibilities in the budget which the Commission may be more inclined to wish to pursue and to expand at the, perhaps, small price of basing it on reining back somewhat on agricultural expenditure.
In other words, it is not enough simply to move resources from one part of the budget to another—although that would be a minor and welcome reform—but it would not be enough, for example, to move agricultural expenditure from the guarantee sector to the guidance sector, since the fact is that, whether it is spent in the one or the other, it is of very little use to this country. We are again paying for something which is to our disadvantage.
Nor would it be an advantage to move expenditure from agriculture to an enlarged and swollen regional or social fund. Unless one happens to be, as I gather the hon. Member for Mid-Oxon (Mr. Hurd) is, a fervent proponent of a federal Europe, of a supranational tier of government, and unless a case can be made—I should find great difficulty in seeing how it could be made—that expenditure of a regional or social nature ought to be undertaken at a European level rather than at a national level, the only point of switching expenditure in that way is political, with the political objective in mind of bringing about perhaps not even a European federation but a fully fledged European union.
In other words, the first set of problems raised by this major document comes down simply to the question of controlling the budget—something which the Council of Ministers and the Commission have been notably unsuccessful in doing so far. But, as my right hon. Friend said in his opening speech, other documents which we have to consider tonight throw up rather more technical and specific illustrations of exactly the same difficulty, that of controlling the budget. As my

right hon. Friend said, three of the four documents recommended for debate by the Scrutiny Committee involve an attempt to escape from the Council's control over expenditure. I was interested to hear his comments on that and to accept that he understands precisely what the European Assembly is trying to achieve here.
But it is also the case, as again my right hon. Friend made clear, that a further document, No. R/3312, tries a different method of escaping from Council control. It attempts to convert a figure which the Council specified as a ceiling into a guideline, and I am very glad that my right hon. Friend has taken that point and has pledged the Government to preventing the European Assembly from succeeding in that ploy.
I think it worth drawing the attention of the House to what the Scrutiny Committee said in a notably restrained but, I think, pointed way in referring to these documents in the following terms:
 While there is, apparently, nothing illegal in this procedure as it affects the first three cases, the Committee entertain grave reservations as to its propriety.
I think that the House ought to endorse that comment.
As the hon. Member for Blaby (Mr. Lawson) rightly pointed out, we are not solely concerned—indeed, hardly concerned at all—with what happened in 1978. We are concerned with the future of the budget and with the current situation as regards the budget, and here the major development is, of course, the constitutional crisis which has arisen between the competing claims of the European Assembly and those of the Council of Ministers.
At this point I wish simply to say that I hope that in winding up the debate the Minister will reaffirm the Government's determination to prevent the European Assembly from escaping from the limitations on its competence which it has tried to avoid by the attempt to increase the regional fund.
As I suggested a moment ago, we are concerned partly with the nature and size of the budget, but we are concerned also with a further—

Mr. Kenneth Clarke: I was interested in what I thought was a remark from a sedentary position by the


hon. Member for Southampton, Itchen (Mr. Mitchell) because it seemed to me to raise a relevant point. Is it really the position that the hon. Gentleman is adopting a Gaullist attitude, that it is more important to try to cut the European Assembly down to size than to look at any possible advantage to this country from being in the EEC at all?

Mr. Gould: I am rather surprised that the hon. Gentleman should reveal the sort of mentality which thinks that for a mess of pottage it is worth selling one's birthright. In fact, what we are offered by the proposal endorsed by the European Assembly is, I gather, £25 million. That would build what? A little less than one mile of urban motorway. Is that worth selling the principle of continuing control by this House and this Government, through the Council of Ministers, over the growing EEC budget? I hardly think it worth posing the question since the answer seems so obvious.
I was about to move away from the question of the size of the budget to another preliminary question which also is not raised in the Commission document but which is implicit in the whole question of the future financing of the Community's activities—who pays for this budget? This question was brought into the open by my right hon. Friend the Prime Minister in his now famous speech at Guildhall some months ago. What he then said was extraordinary enough. It revealed the amazing state of affairs that this country, one of the poorest in Europe, is required to pay the largest, or perhaps the second largest, contribution to the budget.
I am delighted to see my right hon. Friend actually recognising that development, making a speech about it, drawing attention to it and calling for action. It seems to me to be a most helpful development in the sense that at last we are seeing the facts of the situation breaking through. Despite all the efforts of establishment opinion, of the media, of the conspiracies between Front Benches and the rest, at last the basic facts of the cost of our membership are coming through. On that ground alone I welcome it.
Even then my right hon. Friend slightly understated the damage that is being done to us on that ground. Since

my right hon. Friend last spoke on these matters, we have had the benefit of an analysis that was published in one of our leading newspapers of our next contribution to the budget. The publication of that analysis did us a great service. The analysis calculated the cost in direct cash payment terms of our trade in food. I believe that in trying to estimate the size of our net contribution to the budget the economists from the Cambridge Economic Policy Group understated the true position. They were concerned with the budget as it had applied one year or two years ago. I prefer to consider the position that seems likely to develop this year.
In so doing I am in a fortunate position. As the House will recall, on 10 July last we had a debate on the draft EEC budget for 1979. My right hon. Friend spoke from the Dispatch Box and made some forecasts. He agreed that they might be too high or too low. Nevertheless, he gave the best available forecasts as long ago as 10 July. He said that the 1979 draft budget would lead to a gross direct cash contribution from the United Kingdom of £1,760 million. He told us that from that contribution should be deducted £260 million which would be due to us under the transitional arrangement which expires this year. He was rightly prepared to deduct about £500 million in various receipts from the regional and social funds and from other sources. He made it clear that, on his calculation, our net direct cash contribution for this year would be £1,000 million. That was based on a relatively generous assessment of our possible receipts.
If we add to the £1,000 million net contribution the £370 million that the Cambridge Economic Policy Group estimates as the cost of trade in food, we are talking about a lump sum of more than £100 a year handed by each family in the United Kingdom direct to some of the richest countries in the world. That is the true estimate of the cost in direct cash terms. That is made even more ironic by the fact that, when we ask why we are paying that, the answer is that it is overwhelmingly for the common agricultural policy, which is doing us as consumers and traders an immense amount of damage.

Mr. Marten: The Chancellor of the Exchequer described our position simply


in a speech made at Brussels which was reported yesterday in The Daily Telegraph. He said that Britain would face a net bill of £1,000 million for its Common Market membership next year. He added that that would almost wipe out the United Kingdom's balance of payments gain from North Sea oil. That is another way of regarding our contribution to the budget.

Mr. Gould: I am glad to hear, as one would expect, that the Treasury has a united voice on this matter.
I deal with one element that sometimes others attempt to introduce into the calculation. It is suggested that from the £1,000 million net contribution we should deduct the gross sum of monetary compensatory amounts, as if these amounts were in some sense a subsidy that should be regarded as receipts. I deal with that argument briefly in general terms. Monetary compensatory amounts are in the nature of Green Shield stamps, but at a price that is twice as high as we need to pay. In practical terms, MCAs are sums paid from Commission funds into the pockets of exporters to the United Kingdom from Germany, France, Holland and elsewhere. In that sense they cannot be regarded as subsidies.
If we were to express common agricultural prices as they should be expressed, in a truly representative unit of account, it would be clear that, with the exception of the United Kingdom and Italy, monetary compensatory amounts and the whole structure of green rates are a means of pushing up common prices to prices regarded as acceptable in national terms. If the hon. Member for Blaby cares to read the report in Hansard of 13 December, he will find the facts set out in great detail. I do not have time to develop the argument in full this evening.

Mr. Lawson: The House should be clear where the hon. Gentleman stands. If the arrangements were changed so that we had what is known as a juste retour, would he be happy with our membership of the Community, or is his objection of a totally different sort?

Mr. Gould: It may surprise the hon. Gentleman to know that I have a certain degree of luxury. There are perhaps half a dozen major issues on which I

regard our membership as unsatisfactory. The mere fact that there are a further five powerful points that reinforce my opposition hardly seems a reason for regarding my objection as any the weaker.
Before leaving our unfair contribution to the EEC budget, which is a haemorrhage of resources which must be staunched, it should be said that no Government could allow a sum so large to be taken away from us for no purpose other than one that is damaging. If the hon. Member for Blaby and his colleagues should ever find themselves on the Government Benches, I am sure that they will take exactly the same view. It is a view to which my right hon. and hon. Friends have been forced by the facts. We cannot allow the present position to continue. The louder and the stronger the House says that, the quicker it will be understood in Europe and the quicker we shall achieve some badly needed change.
Against that background, and in that context, it is now proposed by the Commission in the document that we are considering that nothing should be changed and that we should look forward to an expansion of the budget and to finding new resources. That is a completely unacceptable order of priorities. Resources at present comprise customs duties and agricultural levies. I pause only to remark with a certain irony that the reason why agricultural levies are said to be appropriate as own resources is that, as the Commission document blandly states, they are the product of Community policies. Surely there is no other reasons for having such levies. In addition to the duties and levies, there is the yield from up to a 1 per cent. levy on VAT.
It is proposed by the Commission for the purposes of discussion that the limit should be increased on VAT and that new sources of revenue—for example, alcohol taxes, petrol taxes and tobacco taxes—should be fed into the growing and voracious maw of the EEC. A number of arguments could be advanced on the precise proposals. I advance only one on VAT. As the Commission states, VAT for the United Kingdom is a highly regressive tax. It penalises the United Kingdom. It is regressive because it imposes a greater burden on us than is


warranted by our share of the Community's total wealth.
It is ironic that, despite all the charges about the British being bad Europeans and un-communautaire, we happen to be one of the two countries that met their obligation of introducing legislation to enable us to be ready to make our VAT contribution. As my right hon. Friend made clear, some of the leading members of the Community are still not in a position to meet that obligation.
The Commission concedes in its document that there is a close bond between the concept of own resources and the growing power of the European Assembly. It observes that as the method of financing is increasingly coming to depend on own resources, national Governments are being bypassed and that that has been accompanied by an increase in the powers of the European Assembly. There is another cautionary reason for considering carefully any proposal that would increase the own resources basis of financing the EEC budget.
We cannot be expected further to contribute to a budget the purposes of which we profoundly disapprove and which do us enormous damage and whose present funding is quite unfair and totally unacceptable, and when the whole concept of extending that budget can be seen only as a step towards a European federation to which we are diametrically opposed. Our priorities should be different. They should be to reduce the size of the budget, to change the objects for which the expenditure is made and to eliminate the grossly unfair situation in which we are making a contribution far in excess of our ability to pay.

8.11 p.m.

Mr. Neil Marten: I am glad that we are debating document No. R/3185. That allows the debate to run far wider than if we were just debating the other limited documents. Therefore, I wish only to speak to that document.
The hon. Member for Blaby (Mr. Lawson) said twice that he was a European. I do not deny that. Presumably, he was born in this country, which is in Europe. However, he must not confuse being a European with the status of people like myself who are just as European, if not more so, as he is. I have a

slight French connection, through my mother. However, I am anti-Treaty of Rome. That document is like a schoolboy ode. It should have been scrapped and another start made.

Mr. J. Enoch Powell: Why start again?

Mr. Marten: That is a good point. We could have started to obtain co-operation in Europe based first on a free trade area, taking the process much slower than was the way with the Common Market—which tries to impose co-operation in too short a time by means of the ridiculous document the Treaty of Rome.
The document with which we are concerned is about one main matter—the budgetary powers of the Assembly. So far there has been a general consensus that no more power should be given to the Assembly in budgetary matters and that power should remain with the Council of Ministers as long as the Council of Ministers exists. I go one stage further. Why give any power to the Assembly, even when it is directly elected? Why not remove the power from that body? In that case the Chief Secretary need not make such nonsense of matters as he did at the Council of Ministers. Control must remain with the Council of Ministers. That must be stated time and again. Otherwise, the Assembly will go on and on seeking more power irrespective of its political complexion.
I draw the attention of the House to the tenth report of the 1978–79 Session of the Select Committee, which makes this point. It draws to the attention of the House the documents by Euratom on safety in thermal water reactors and materials and methods in applied metrology, documents Nos. 3312 and 4102. At the bottom of the page it says:
 The amendments would appear to be part of the Assembly's continuing campaign to secure for itself a greater degree of freedom of authority in budgetary matters.
That is another example.
I now refer to the Scrutiny Committee, of which my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) is Chairman. I shall not pay him the usual compliments as he has heard them so often.
I see, in so many of the piles of documents that come through the hands of our Committee, small attempts by the


Assembly to obtain more power. It is disturbing. I should like to see this Parliament make it clear that no extra power will be given to that Assembly.

Mr. Kenneth Clarke: Does my hon. Friend agree that it was before the Parliament had any budgetary powers that the present budgetary imbalance developed and that agriculture achieved a disproportionate amount of the total budget? If the whole matter is left to the Council of Ministers, it is left in practice to an annual discussion between the Ministers of Agriculture of each of the member States. Far too many decisions about the CAP have been left to Ministers of Agriculture who are almost entirely answerable to farming lobbies in their own countries. That is why there are the present appalling problems.

Mr. Marten: In answer to the first part of the question, the situation got out of hand when the Conservative Government were in power. The Labour Government have since taken a slightly tougher line. The debate illustrates the constant struggle between the Assembly and the Council of Ministers. I dread to think what will happen when Ministers decide on their own expenses after they have been directly elected. That will be a decision of the Assembly. It will not go to the Council of Ministers. In the Council's present frame of mind of wanting to increase its expenditure, I dread to think what expenses it will vote for itself.
My hon. Friend the Member for Blaby made an important speech. He set out from the Front Bench the attitude of the Conservative Party towards increased expenditure. Therefore, as a result of his speech we are beginning to be more consistent. I do not like to say this, but I have noticed that sometimes we have said one thing in the Community and another in our domestic policy. As we come up to the European elections, there will be a great number of people watching our actions on that point, especially if both the general election and the European elections take place on the same day. Unless our parties are absolutely consistent, they will look slightly odd if they say one thing in the Euro-elections and another in the domestic elections.
From now on, let us be, as a party, consistent. If we say that we shall cut

Government expenditure in this country, let us do the same in Europe and veto any increase in expenditure when we participate in the Council of Mtinisters. That may be bad luck on the other members of the Community, who want to increase expenditure. However, we joined the Common Market. It asked us to join. We applied. The Common Market accepted us. It must accept the fact of life that one country can veto a proposal. I hope that we shall do so. It is in our national interest not to increase public expenditure. I hope that we shall have one standard of policy both in the Community and at home and that this matter will be carefully watched in this year of the Euro-elections.
The hon. Member for Southampton, Test (Mr. Gould) referred to the question of voting. He entered into a slight discussion with my hon. Friends. I wish that we could achieve more recorded votes in that Assembly. People go there and say "This is what was said and this is what was done ". However, there is no record of the voting. Votes are recorded only on special occasions when over 100 Members are present, and so on. I should like to be able to see how the Members vote on every occasion.
Document No. R/3185 deals with the increased expenditure that is to be incurred by the EEC in due course. I do not suppose that the Commission has consulted people before making its suggestions. I suppose that some bureaucrat in an office may have suggested taxing, for example, cigarettes, alcohol and petrol. If the Common Market were to seek to raise additional taxes by taxing cigarettes, alcohol and petrol, it would cause great anger in this country. There is enough anger as it is in this country about the Common Market, but that sort of proposal would make people much angrier than they need be. If the EEC wants more money, there is plenty of money available under the CAP. Three-quarters of the entire budget is related to the CAP. The cost of buying up surpluses, of storing those surpluses and of subsidising exports amounts to £6,500 million a year. If the Community wants more money, it can get it by cutting down on that CAP expenditure.
I do not believe that the absurdity of the Common Market as we know it today


can go on. I believe that if this proposition about more funds comes to the crunch, it will be at that moment that we can force the issue and get the common agricultural policy right. Some of us have said so for several years. We were not always popular with some people when we said two or three years ago that the CAP ought to be reorganised and is nonsense. Opinion is now beginning to move, and people are beginning to accept that the CAP is nonsensical.

Mr. Kenneth Clarke: Everyone has always said that.

Mr. Marten: My hon. Friend mutters that we have always said that, but we have never produced any policy on how to reorganise the CAP. If anyone had suggested two or three years ago at meetings of the agricultural committees that the CAP should be reorganised, hands would have been thrown up in horror. It is only recently that people have started to write pamphlets on how the CAP should be reformed.
I believe, therefore, that we must concentrate all the power in the Council of Ministers, and not transfer it to the Assembly, because in the Council this House has a little measure of control, and the Ministers can certainly veto any further madcap ideas or proposals for increases in expenditure. But if the Assembly gets more power, the proposals cannot be vetoed there.
We agreed to the holding of direct elections because we were told that we must have them in order to make the Community more democratic. If that is the reason, surely we must accept the democratic decisions of the Assembly. If the Assembly is given more power, it will vote for more expenditure. If that is supposed to be democratic, we shall have to go along with that. If there were to be a motion before the Assembly—I have used this example before—to the effect that the Assembly believes that North Sea oil should become the property of the Community, every member State except the United Kingdom would vote for that, and it would be carried. If we believe in democracy, of course, we must follow the wish of the democratically elected Assembly.
While I am on the subject of money, Mr. Deputy Speaker, I should like to mention the information budget for the direct elections that we are about to have. I understand that the Community is to spend £7·5 million on information. I do not know how many hon. Members have been to see the display of information. I went to the opening session of it at the Festival Hall the other day. People may imagine that it is fair and neutral. I ask hon. Members to go and look at it and to decide for themselves whether it is neutral. In my opinion, it is not at all neutral, particularly on the question of the CAP. It is very biased. As the hon. Member for Birmingham, Handsworth (Mr. Lee) said the other day at Question Time, the election expenses of the candidates have started to run already because the date of the election has been marked down. It is fair to make the point that this exhibition, as it goes around the country in the various constituencies of the Euro-candidates, will be an election expense. I understand that this will be tested in the courts. If it is proved to be an election expense, and if the candidates have gone over the top, they will, of course, all be unseated if they have had this information bandwagon going through their constituencies, hiring halls and so on.
In all these matters—be it this subject. North Sea oil or election expenses—we must keep control in the Council of Ministers and not hand over any powers to that Assembly.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I hope that the House will share my desire to try to maintain a balance between those who are for and those who are against. I think that it would only be fair to conduct the business and the debate on that basis. I was looking for the hon. Member for Farnworth (Mr. Roper). He will probably return, but he is not present at the moment. Therefore, I propose to call another hon. Member who is in favour of the EEC.

Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. It is common practice to call speakers not on the basis of whether they are for or against any subject but on the basis of the side of the House on which they sit. The fact


is that on this particular issue there are many divisions in both major parties—and, indeed, even in one or two of the minor parties whose representatives have not taken the trouble to come along to this important debate.
I suggest that to embark on a different convention could create a number of difficulties. For one thing, there may be Members here who are very much opposed to the massive expenditure in this budget which we are debating but who to some degree may well be in favour of the EEC. Therefore, I should have thought that it was impossible to make a judgment on anything other than a party basis, which this House already follows. It is well known that the House makes its decisions on the best possible basis.

Mr. Deputy Speaker: Having spent almost five years in the Chair, I think that I can judge those who, in my opinion, are for or against the EEC. I am only trying to maintain a reasonable, sensible and just basis for debate. This is a cross party matter. It is not as though it were a motion coming from one party. There are differing views on both sides of the House. It is at the discretion of the Chair as to which side a speaker is called from. It is entirely a matter for the Chair. However, I shall not start an argument at this late hour because I want to get home early. Therefore, I shall call the first one. Mr. John Lee.

Mr. Dennis Skinner: Further to that point of order, Mr. Deputy Speaker. I think that this is a problem. Although you have now taken account of what my hon. Friend the Member for Keighley (Mr. Cryer) said on this matter, I think it is a mare's nest. You will have noticed that in the past few weeks, in the run-up to the direct elections, some Conservative Members who are avidly pro-Europe have become muddled in their current views—I am not saying that it is permanent. Therefore, any attempt by you to sort out the pro-Europeans and anti-Europeans at this moment, especially amongst members of the Tory Party, would be a little more than difficult. It is as well—

Mr. Deputy Speaker: Order. I do not know what the point of order is. It would present no difficulty to the Chair. Mr. John Lee.

Mr. Skinner: Yes, he is all right.

8.28 p.m.

Mr. John Lee: I am obliged to my hon. Friend the Member for Bolsover (Mr. Skinner) for his moral and, indeed, vocal support.
It is a pleasure to follow the hon. Member for Banbury (Mr. Marten). One so often agrees with him. I shall take up just one point that he made. I raised with the Law Officers—indeed, I am awaiting a considered reply from them—what the legal position will be with regard to expenses, not just in relation to the exhibition that is presently going round the country in its lavish fashion, which will misrepresent the situation, but expenses generally. It might be in order if I were to spend a moment or two on this.
As we all know, every party and many political lobbies engage, perfectly legitimately, in election promotional exercises in the months leading up to a general election. Indeed, I am conscious of a fair number of Conservative Party posters which have been erected round the country. Invariably, the practice is that the moment a general election is called all those posters come down and all promotional activity of an extraneous kind ceases. The reason for that is that if it were to continue candidates in whose constituencies those promotional activities were being conducted would find themselves liable to have to include a proportion of those costs in their election expenses. As was pointed out, if they go over the top they are in danger of being unseated.
What I suspect has not yet been fully understood is that since the date for the European elections, so-called, has been fixed statutorily for 7 June, any kind of promotional activity that has been going on for some time past—certainly any activity in the weeks leading up to 7 June—may cause any kind of election promotional activities to be countable in the way that I have suggested. If that be so, there will be quite a number of successful candidates who may find themselves—

Mr. Deputy Speaker: Order. I remind hon. Members that the debate is due to finish at 11.30 p.m. Some may think that it can continue into the small hours of the morning, but it will finish at 11.30 p.m.


Therefore, I do not think that hon. Members should raise matters that are strictly out of order. I believe that the hon. Member for Birmingham, Handsworth (Mr. Lee) is straying rather wide of the subject under discussion, which is the Community budget.

Mr. Lee: I thought that the budget included expenditure, but I certainly shall not argue with you, Mr. Deputy Speaker. I believe that I have made my point. I believe that a number of people will find themselves at the receiving end of some election petitions when the time comes.
My hon. Friend the Member for Southampton, Test (Mr. Gould) made his case as well as one normally expects him to. The fact is that there has not been the slightest sign of any improvement in the CAP. Far from the expenditure that is debited to this country being diminished, either in percentage or absolute terms, the reverse has taken place. The process has got steadily worse, and there is every reason to suppose that if the three Mediterranean countries which are presently candidates for Community membership join they will add that much more muscle to the lobby of those who are in favour of the present high-cost Community agriculture procedure. Far from the CAP being modified, let alone disappearing, I believe that we shall find it more powerfully entrenched than ever.
In a previous debate I put a question to a Conservative Member—I believe that it was the hon. Member for Devon, West (Mr. Mills). I should now like to put it to my right hon. Friend. Has there ever been any serious attempt, either during the renegotiations or at any other stage, to substitute the CAP by a deficiency payments system on a national basis? Has that question ever been put, even by my right hon. Friend the Minister of Agriculture, Fisheries and Food, admirable though he is? He is the Minister who more than anyone else is fighting to mitigate the effects of this absurd system. Has anyone fairly and squarely suggested that to Mr. Gundelach?
It is said that the CAP is an open, progressive kind of concept aimed at promoting the interests of Europe as a whole on a modern basis. Has the Community ever been asked "As a token of your

earnestness, do you accept that the CAP should go and that each individual country will pay for its own agriculture on a deficiency payments basis, such as we in this country have successfully conducted ever since 1947?" I believe that we can make that statement with some pride.
We know perfectly well what would happen if that were tried. We would get a dusty answer, because there is not the slightest sign of any improvement occurring.
I should like to dot the i's and cross the t's with regard to some of the points that have already been made. I have gone through the various reports that have been made in relation to agriculture. I believe that even were there to be an embargo on price increases as a result of the present trade-off that is now going on—and in which my right hon. Friend is playing such an admirable part—there would still be a considerable increase. I believe I am right in estimating that the cost of storage and subsidy for the whole system of intervention stocks would be up by £6·5 billion—about 10½ per cent. on last year—even without there being an increase in the present round of agriculture negotiations.
My right hon. Friend opened the debate with tactful imprecision. He was careful not to commit the Government. But we are entitled to know more. Most Labour Members would repudiate the idea of the Community having further financial resources. But if that is to happen the Government should have the courage to say so and state what the resources are to be. Will resources be derived from a percentage of income tax, wealth tax or another indirect tax as mentioned in one of the documents? For example, one suggestion was that there should be a tax on energy and that that should be hypothecated to energy resources in the Community.
There are seven consultative documents and to each is attached an explanatory memorandum, which is largely superficial in character and slovenly in wording. These memoranda are at least brief compared to the documents to which they relate. In relation to documents Nos. R/3089, R/3090, R/3146 and R/3093, there is reference to doubt about the legality of the proposed carry-forward of the proposal.


My hon. Friend the Member for Farnworth (Mr. Roper), who is one of the few fervent Euro-fanatics on the Labour Benches, asked whether this item would be additional to or in substitution of the new budget's expenditure proposals. The Minister said that it would be in substitution. But as a lawyer I should like to know what the illegality is and how it can be put right. It is slipshod to say that there is some doubt about legality. If it is illegal, we should know in what way.

Mr. Denzil Davies: The statement that there is some doubt is correct. Some lawyers think that it is and others that it is not. That is the problem.

Mr. Lee: That is most helpful. Perhaps my right hon. Friend would tell us whether that has been challenged in the court of the Community. If not, one would have thought that it should have been put in a form less open to challenge.
The basic question in the debate is whether the Government take the view "Thus far and no further," and that for whatever other expenditure and for however long this absurd organisation continues the Community is not to receive any more money. Any switch in expenditure should be at the expense of the common agricultural resources. If that is not the case and the position of the Government is weaker than that, how much money will the Community expect from this country? In this House we are entitled to know from what sources the British taxpayer is to be mulcted to supply the extra funds. I hope that in replying my right hon. Friend will be more precise.

8.40 p.m.

Mr. Peter Mills: I must declare an interest in that I am pro-European and have an interest in agriculture. Apart from my hon. Friend the Member for Blaby (Mr. Lawson), who opened for the Opposition, I am the first pro-European to speak in the debate tonight, and I am proud of it.
I should like to take up one or two points in the communication from the Council—" Financing the Community Budget—The Way Ahead ". The first point is that the Council talks about the need for constraint in public expenditure. "Constraint" is a very important word. The general public are concerned about

the level of the Community budget at this time. A growing number of people, particularly consumers, feel very strongly that things are getting out of hand. Therefore the Community must look very carefully at the budget and at the word "constraint", which should be written on its heart because the public will demand that this be so.
In the document the Commission talks about the Community budget level and a national level. I believe that the Community budget should be held at its present level and, if possible, reduced but that the national level of expenditure should be increased, particularly when there are certain problems within the Community, such as agriculture.
Let us consider the example of Germany and its desire to support small farmers there. The problem of small farmers is confined to the Germans, and if they wish to support those farmers at the level at which they are supporting them now they should pay this money out of their own national funds.
Perhaps we should set a good example with some of our social problems in agriculture, such as the hill areas. We get a contribution from the EEC for our hill farmers. If we are asking the German Government to pay for their support of their small farmers out of their national funds because that is their special problem, we should do the same to support our hill farmers. I am all for restraint in the Community budget, and I hope that in time it will be brought under control as we turn more and more to national support for particular problems.

Mr. Lee: Will the hon. Member comment on the fact that we tried to do this in relation to the pig subsidy but that was ruled out of order by the Community?

Mr. Mills: With respect, the pig problem had nothing to do with social problems. It was entirely about MCAs. coefficients and the way in which the MCAs were constructed. That is a different matter.
Next, the document talks about Community expenditure. There is no doubt in my mind that this is important. If we really believe in the EEC, we must realise that there must be expenditure. We cannot have the benefits that the Community brings without a certain amount of expenditure. Those who are opposed to


the concept of the Community say that the expenditure is totally wrong. If one believes in the Community and what it is achieving, one should be prepared to pay for those achievements and the financial wherewithal to cover its needs should be provided. There are advantages, and I make no bones about saying that.
I still believe passionately in the Community because I believe it is right that there should be a strong European bloc. I believe that the Community promotes peace, that it is good from the defence point of view and that it is important for the West that Europe should be united. The aims of the Community are absolutely right. Some hon. Members do not believe that, but if one believes in the Community it follows that there must be a certain amount of expenditure.
There are disadvantages but also many advantages. When one examines British farming, in which I am particularly interested, one sees that there have been considerable grants for hill-farming areas. There have been grants from the Community regional fund, from which considerable benefit has been derived. I could go on.
I passionately believe that if this country took advantage of the Community from an economic point of view there would be a much larger European market place into which Great Britain could thrust forward with her exports. What is sad about the agricultural and food world is that Great Britain has not seized the opportunities. Germany, France and Holland have done so and have greatly increased agricultural and food exports to this country. When one examines the major reason why we are in Europe, one can see that there have to be funds for this sort of expenditure.
The paper "Financing The Community Budget—The Way Ahead" also mentions the two foreseeable elements that have to be taken into account—the introduction of Greece and Spain to the Community. I believe that those accessions will give rise to real problems particularly in agriculture and the CAP. However, I believe also—far more than do some of the weary willies in the House—that the opportunity should be seized to make the necessary changes within the CAP to deal with the entry of Greece and Spain.

That will provide the politicians who are on the hook with the necessary excuse to make the inevitable changes. I welcome the entry of Spain and Greece because I believe that it will give us the chance to make the necessary changes in the internal working of the CAP.
The paper states:
 The Commission hopes that every effort will be made to contain the cost of agricultural guarantee expenditure and its own proposals will be directed towards this objective.
I believe that that aim can be achieved and I do not accept that the position in relation to the CAP is hopeless. If the will exists, positive steps can be taken to deal with surpluses. The problem in Europe is that the will is not there to deal with structural surpluses.
About 75 per cent. of the Community budget is concerned with agriculture—95 per cent. of that figure financing intervention and only 5 per cent. financing structural reform—and there is an obvious case for introducing changes. I disagree strongly with the hon. Member for Southampton, Test (Mr. Gould), who said that there was not much point in transferring money from the intervention fund to the structural reform fund. There is every reason for doing that. If we deal with the structural problems in European agriculture, we shall start to reduce the surpluses—and that is what it is all about. It is important to ensure that far more money is channelled into structural reform within the EEC rather than into intervention.
The paper talks about a lack of buoyancy and tells us about the various methods of raising further funds. It says:
 For all these reasons, there is no doubt that new revenue will be needed. The only question is when.
The paper says that decisions will have to be made by 1982. If we have until 1982 before we have to find fresh ways of raising increased revenue, we have time to look at the whole matter again. I hope that the Minister will ask the Community to look carefully at its budget to see where it can be pruned and where money can be diverted into changing some of the structural problems within Europe. The European Parliament can also play a part in dealing with the problem by seeking to influence the Commission and Ministers to do something about it.
In the discussions and probings of the Select Committee of which I am a member, the Chief Secretary to the Treasury said in his evidence:
 Finance Ministers are not necessarily the most appropriate body to decide agricultural policy ".
That is correct, but they are the best Ministers to put on the necessary restraints. In the Committee I made a strong plea that the Finance Ministers should take a firm stand on these matters. They should not be left entirely to the Ministers of Agriculture. It is the duty of the Treasury to take action. Heaven knows that when I was a junior Minister at the Ministry of Agriculture the sticky, powerful hand of the Treasury was there all the time. Why cannot we have the same sort of effort and pressure from the Finance Ministers to get the required changes in Europe?
My words did not fall on deaf ears. The only problem is that Ministers are hearers but not doers. We need not only hearers but doers. The Chief Secretary said:
 the idea of bringing pressure to bear through Finance Ministers on Agricultural Ministers in order to reduce the Guarantee Section expenditure is one, indeed, that I have been pursuing.
We want to hear from the Minister of State what progress has been made. Otherwise, it will be the same old story of hearers but not doers.
I repeat that I do not think the position is hopeless. If we can get this pressure through the Finance Ministers, we can get the restraint which is needed and, above all, the changes within the Community and within the common agricultural policy which are so necessary in the interests not only of the country as a whole and of consumers but of the producers, the agriculturists.

8.55 p.m.

Mr. Douglas Jay: The hon. Member for Blaby (Mr. Law-son) invited right hon. and hon. Members to engage in a searching scrutiny of this EEC budget. My hon. Friend the Member for Southampton, Test (Mr. Gould) directed a searching scrutiny at the budget in total. It might not be a bad idea to look at some of the details as well as at the aggregate figures of the budget. I have been attempting to do that, but, because of your appeal for brevity, Mr. Deputy Speaker, I shall take

only one example of the results of the scrutiny which I have conducted so far.
A week ago I addressed a question to my right hon. Friend the Foreign and Commonwealth Secretary on the subject of the salaries of the members of the Commisison, which are, of course, part of the EEC budget. My question asked my right hon. Friend
 what were the salary and expenses, respectively, expressed in £ sterling, paid to EEC Commissioner Haferkamp in 1978 ".
In order to be slightly more precise than some hon. Members have been tonight, I shall read the reply in the words given me by the Foreign Office Minister. They were as follows:
 Mr. Haferkamp's basic annual salary as a vice-president of the Commission expressed in £ sterling and with effect from 1 July 1978 is £63, 966 gross, £42, 212 after tax. A vice-president is also entitled to tax-free allowances totalling £17, 189 plus an allowance of £739 for each child.
My hon. Friend went on:
 A common representational fund of £195,000 is allocated for the expenses of all the Commissioners from which sub-allocations are made to each Commissioner. I have no information on how much of this was allocated to Mr. Haferkamp."—[Official Report, 14 February 1979; Vol. 962, c. 556.]
Those are remarkable figures. It emerges that the total annual salary and expenses, free of tax, which this vice-president receives is £42, 200, plus a little more than £17,000. That is £60,000 tax-free. I do not know what gross income one would have to have in this country to receive £60,000 after tax. But, looking at the figures, I ask myself whether it is not rather discreditable for this country to be associated with an organisation which is involved in financial scandals of this magnitude.

Mr. David Stoddart: Will my right hon. Friend confirm that, expressed in weekly take-home pay terms, Mr. Haferkamp will be getting £1,135 net, after tax, plus £14 for each of his children?

Mr. Jay: If I have it right, it is very close to that. I should not like to do the arithmetic in my head, but it is £60,000 per annum, after tax.
I want briefly to ask my right hon Friend a few questions to elucidate this further. Who in this organisation decides


the salaries and expenses of the Commission? Have there been any comparability studies with similar authorities elsewhere?

Mr. Deputy Speaker: Before the right hon. Gentleman puts his questions to the Minister, perhaps he can tell me whether there are any vacancies.

Mr. Ernest G. Perry: Well said!

Mr. Jay: I am not sure that I have followed your question, Mr. Deputy Speaker.
I should be glad to know whether there have been any comparability studies in this matter. More seriously, it would be interesting to know whether the Commissioners decide their own salaries or whether they are decided by the Council of Ministers, or by whom. If they continue at this rate, I do not see much possibility of financial restraint in this budget. Can my right hon. Friend also say whether all the other vice-presidents of the Commission get a similar salary and expenses? How many vice-presidents are there?

Mr. Budgen: Does the right hon. Gentleman agree that one appointment that can be used for comparison is that of our ambassador in Washington?

Mr. Jay: I am sure that diplomatic salaries throughout the world could come into such a comparability study, but it would be interesting to know who decides the Commissioners' salaries and, at the very least, what is the total sum of all the salaries of the Commissioners, including the President and the Vice-Presidents. Is it also possible to know more about the sub-allocations of expenses which go to individual Commissioners? We are given a total of £195,000. This is, after all, public money. I do not know why the sub-allocations, as they are called, should be hidden from this House or from the taxpayer who eventually has to pay the money.
I should be most grateful if my right hon. Friend would give more information. It is a matter in which the public take a good deal of interest. Unless more information is provided, the impression will be given that there is a certain atmosphere of corruption surrounding a great deal of these dealings in Brussels.

9.2 p.m.

Sir John Eden: I want to start by welcoming document No. R/3185. I do not think that any hon. Member has so far welcomed it. I believe that it should be welcomed. It is a useful exercise in anticipating the trend of expenditure and trying to indicate the sources from which revenue is to be collected. This is not done as often as it might be done, even in this country.
We do not look so far ahead into the future and consider the way budgets are likely to be shaped in years to come. It might be a useful exercise if we started doing so. At any rate, it is helpful to be put on notice that if present trends continue, and given the likely increased costs which will arise following enlargement, alternative sources of revenue will have to be found. The fact that notice has been given might persuade those responsible for the direction of policy in these matters to determine a course of events which will make it unnecessary for the increases to be brought into effect. I believe that that is asking too much.
What matters in my view is not just the powers given to the Assembly or the powers that are available to the Council of Ministers but the attitude that is deployed in both those bodies.
This Parliament supposedly has powers to control the expenditure of the Executive, yet in a series of debates my right hon. Friend the Member for Taunton (Mr. du Cann), as Chairman of the Public Accounts Committee, has been prominent in reminding us how lamentably we fail. We fail, as I can testify from experience as both a Back Bencher and a Minister, because individual Members often put forward local or constituency cases which justify a claim for increased public expenditure. That is most often so with regional assistance. There is hardly a debate on that topic in which hon. Members do not make requests for increased expenditure, whether for an industrial development area or any other sort of development area, including tourism, with extraordinarily well-argued justification for doing so.
What we have been seeing in the European Assembly is akin to what we have seen so often in this House over regional policy. That is what worries me most when considering the future of the budget and the questions about how this is to


be financed in Europe. What will be the attitude of Members of the Assembly which will dictate the reaction of individual Ministers in the Council?
The hon. Member for Southampton, fest (Mr. Gould) was right to remind us of the current situation and to put under the microscope the constitutional relationship between the Assembly and the Commission. But the recent exercise in which the Assembly has played a prominent part over the current budget has resulted in the Commission being urged by members of the Assembly to increase the total available for regional spending, not to reduce it. It is important in this matter to consider not just powers but attitudes.
It might be helpful therefore in contemplating the future also to contemplate what ways may be open to introduce some financial discipline into the Assembly's discussions. Perhaps my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) will have something to say on that later. He is a member of the Assembly and he could tell us the extent to which this is being thought about.
At present, members of the Assembly can take spending decisions without the corresponding obligation to decide where the money is to come from. Until that happens, we are likely to see a repeat of what took place over the current budget, with the Assembly, against the wishes of the Council of Ministers, calling for increased expenditure.
In considering the Community's budgetary procedures, the House should look closely at the other documents that we are debating. As has been said, they are more technical, but they are important none the less. The Community countenances a number of budgetary practices which are in conflict with the practice in this country. For example, it is common for sums to be transferred from one chapter of the budget to another in the course of a financial year. Many such instruments come before the Select Committee which examines EEC legislation. We have not in the past felt it necessary to report them to the House because the procedure which has been followed is an accepted one, covered by the Community's financial regulation of 1977.
However, the four transfers which we have reported on to the House and which

are the subject of consideration this evening are of a rather different character. They would have entailed transferring money from the provisional appropriation section of the budget to the operational chapters right at the end of the financial year, when there was no prospect of the money being spent.
More than that, in three out of the four proposed transfers the policies underlying the expenditure had not even been approved by the Council of Ministers. It seems that the reason for this move was to enable the sums in question to be carried forward from the 1978 budget to the 1979 budget. A carrying forward of this kind is foreign to us. It is a procedure which would not happen here. Here sums voted in one year but not spent in that year have to reappear in subsequent Estimates and must be approved by Parliament before they can be spent. In the Community the financial regulation of 1977 clearly permits the carrying forward of sums from the operational chapters of the budget.
I question the propriety and legality of carrying forward provisional appropriations. These transfers seem to have been deliberately designed to avoid any possible legal difficulty. I was glad to hear the Minister say that the Council of Ministers has rejected these proposals. Perhaps the right hon. Gentleman will correct me if I am wrong.

Mr. Denzil Davies: The Council of Ministers is not in a position to reject the proposals but it has expressed its disfavour. Because these proposals are concerned with the non-obligatory part of the budget, there is little the Council can do. What it can do, and the Commission agrees, is to say that the money will not be spent until there is a Council policy decision on those items. The money will remain as provisional until such time.

Sir J. Eden: I am grateful to the Minister for making that clear. My anxiety persists to a greater extent than I thought likely to be the case. We are entitled to ask what has happened to these draft proposals. In the sense that they will continue to lie on the table, is there any power in relation to them reposed in the Assembly? Are we likely to see them brought into life because of the attitude of the Council?

Mr. Denzil Davies: As to the transfers and the documents, the matter has either gone through or will go through, and the Council cannot stop it. The transfers are within the non-obligatory part of the budget. As for transferring from the reserve to the operational line, there is nothing now to stop the Commission and the Assembly from carrying the sums forward to next year's budget. There is still the overriding check that the Commission agrees that the money cannot be spent until there is a policy decision.

Sir J. Eden: I am grateful to the Minister. What we should do—and I hope that the right hon. Gentleman will encourage his colleagues to do this—is to look closely at the financial regulation and consider whether it should be more tightly drawn. Article 107 of the regulation provides for a re-examination of its provisions at three-yearly intervals. The next review is due in 1980. That will provide an opportunity for this matter to be pursued.
In the tenth report of the Select Committee of this Session we commented on documents Nos. R/3312/78 and R/4102/79. These two documents, as the Minister of State made clear, raise important matters of principle. The Assembly here seemed to be writing into the two research proposals a statement that the figures for expenditure attached to those proposals are to be regarded as guidelines only, and, as the Minister of State said—it certainly so appeared to us in the Select Committee—that seemed to amount to a waiver of the legal right of the Council of Ministers under article 88 of the financial regulation to define upper limits for research programmes.
We have reported on two of these matters so far, but the indications are that several more are on the way. The House has no power to vote greater expenditure—we can only approve or reduce an Estimate—and perhaps that ought to apply to the Assembly as well.
Apart from that, while we can have some influence over the Council of Ministers through our access to Ministers here in the House, we in this place can have no influence over the Assembly. That will certainly continue to apply after direct elections. I hope, therefore, that we shall find Ministers ready to retain the concept of fixing upper limits of expenditure and

that we shall give them the maximum support in so doing.

Mr. David Stoddart: I always find our debates on EEC matters fascinating and rewarding. It is a great pity that more hon. Members are not present to listen to some of the comments and to witness some of the procedures to which we have become subject since we have been members of the EEC.
I was particularly interested to hear the speech of the hon. Member for Blaby (Mr. Lawson), for it seems that there is a glimmer of light coming upon the Opposition Front Bench, which hitherto has been—I have said this before and I say it again—so besotted by the EEC that it has accepted everything with little or no criticism. At last, right hon. and hon. Members on the Opposition Front Bench are beginning to see what the EEC could mean in terms of taking away from the control of the House and of Ministers important matters of finance and public expenditure.

Mr. Cryer: Does my hon. Friend notice that it is a curious coincidence that, although this process has been going on over several years, and right hon. and hon. Members on the Opposition Front Bench are neither blind nor deaf—or daft—on these issues, the evidence which he sees accompanies the run-up to an election this year? It is not that they are seeing the light, I suggest, but are realising that, by and large, the electors are deeply opposed to the Community, and they are trying to cash in on that position while retaining some measure of ambiguity in general.

Mr. Stoddart: My hon. Friend may well have a point. Perhaps the pressures of an election are now having some effect. Perhaps the pressures of public opinion are having some effect. Perhaps the hon. Member for Blaby is even on a side road on the way to Damascus and there may be a blinding conversion at some stage.
We hear some extraordinary speeches in our debates on EEC matters. I am constantly amazed at the erroneous notions that people have of what the EEC is all about. I am sorry that he is not here at the moment, but I must refer to the speech of the hon. Member for Devon, West (Mr. Mills), who appeared


to believe that the European Economic Community was somehow also a European defence community. He mentioned the EEC in relation to defence. I thought the hon. Gentleman would know that the defence of Europe was carried out through NATO, which has nothing to do with the EEC. Apparently in this place there is an hon. Member who believes that one of the benefits of belonging to the EEC is that it improves our defence.

Mr. Marten: The reality is that Germany is by far the strongest economic power in the Community. It has the largest army in the Community. Therefore Germany, with a sort of reborn reichsmark, would dominate any defence community in a way that many in Britain would not welcome.

Mr. Stoddart: I am obliged to the hon. Gentleman for pointing out that danger. Others had better take note of that and remember it.
I deal with the documents that are before us. First, I refer to the remarks of my hon. Friend the Member for Southampton, Test (Mr. Gould). He observed that the largest proportion of the Community budget is for the support of the CAP. About 70 to 75 per cent. of the budget goes to the CAP. It is a nonsensical organisation that does not support our agricultural purposes in any way.
Most hon. Members on both sides of the House are opposed to the present operation of the CAP. They want it reformed to ensure that it takes a much smaller proportion of the European budget. That being so, the budget will have to be reduced. I understand that the Commission supports a reform of the CAP, with a consequential reduction in the total budget. At the same time the Commission brings forward proposals to raise extra taxes to deal with a budget that everybody wants diminished. That seems nonsensical. If it is not that, it is suspicious. We should be wary of any proposals that the Commission brings forward.
Britain is already paying far more than its fair share towards the financing of the EEC budget. If we take food costs into account, according to Godley and Bacon in the Financial Guardian of 1 February, the total amount paid by Britain in 1978 was £1,137 million. That is a net cost of

£20 for every man, woman and child in Britain. That is the sum that we are paying to the EEC. This year the sum will be even greater. Our contribution is likely to increase to about £1,300 million, or £24 per head of the population. Every man, woman and child will pay £24 to the Community budget.
Although we are not the richest member State—it is often said that we are one of the poorest EEC countries—we are paying far more than Western Germany, which makes a net contribution of £714 million. France, which is supposed to be in a better economic position than the United Kingdom, gains £576 million. This is the situation in which we find ourselves. We pay a huge, unfair contribution to an organisation which pays us no benefit.
For a long time I have been asking exactly what benefits we get from the EEC. I read out the deficits, such as the £1,137 million that we shall pay this year. We shall pay contributions every year on an increasing basis. In addition, the people of this country, who week in and week out go to the shops, pay far more than they need for their food as a result of our membership. Therefore, we are paying for a detriment. I have been asking this question for a long time: exactly what benefits do we get from our membership of the EEC?
Last October I attended a debate in Blackpool between my hon. Friend the Member for Test and a former Member of Parliament who is now employed in Europe, David Marquand. My hon. Friend made an excellent case against our membership of the EEC and showed clearly how we were financially worse off as a result of that membership and how we had lost our independence. He demonstrated that our trade deficit had increased from £176 million in 1973 in manufactured products to £2,200 million now.
I expected an answer to that question in that debate. I expected to be told the benefits of our membership of the EEC. I expected that Mr. Marquand would show how Britain was expanding as a member of the EEC. I thought that we would be shown how much greater we had become as a nation since we entered this organisation in 1973. However, I was disappointed. Mr. Marquand told me what benefits we gained. He


described them as "non-quantifiable benefits". I have been thinking about that answer for a long time. When I go home in the train, and when I go to bed, I think about those non-quantifiable benefits. However, I have not yet been able to discover what are those non-quantifiable benefits. I shall never be able to find out.

Mr. Nigel Spearing: My hon. Friend may not remember that one benefit was mentioned. Whether it is quantifiable is not clear. Mr. Marquand said that we had the inestimable benefit of an EEC ambassador in China.

Mr. Stoddart: I am obliged to my hon. Friend for drawing that fact to my attention. I probably missed that as I was trying to work out what were the non-quantifiable benefits. I have not yet been informed of the benefits the country receives as a result of our EEC membership.
The document under discussion is serious. We should be obliged to the right hon. Member for Bournemouth, West (Sir J. Eden) for drawing our attention to the fact that the proposals on procedures, if adopted by the EEC, would be alien to this country. We should be obliged to him for the attention that he pays to these matters and for drawing our attention to them.
Document No. R/3185 is indeed a serious document, because it proposes things which I believe this House has hitherto never accepted. It proposes, for example, the allocation of taxes for specific purposes. I believe it is true that the Treasury and this House have never agreed to allocate a tax for a specific purpose, but in this document we have the suggestion that a specific tax should be allocated to a specific purpose. The House should take note of that. What is more, it has been suggested that not only should we pay higher VAT to finance the Community budget but that there should be taxes on alcohol, cigarettes and petrol, or perhaps on energy consumption.
In 1972, when we were discussing VAT, we had a debate on the taxation of energy and decided, strangely enough, that we would make possible a tax on energy consumption. We did not exempt energy from VAT. We zero rated it.

It would be possible, therefore, to put a tax on energy consumption under the present arrangements.
I implore the House to consider very carefully what it is doing. I was glad to hear the speech of my hon. Friend the Minister of State, Treasury and his reservations about this document. He said that this is only a preliminary discussion and that the Government will be making their point of view known very strongly at the Council of Ministers. I implore the House, whatever happens, to watch the position very carefully indeed, otherwise we could find ourselves facing procedures and facing taxes which are inimical to the good government and the interests of this country.

9.33 p.m.

Mr. Richard Body: The hon. Member for Swindon (Mr. Stoddart) will not be surprised when I say that I agree with every syllable of what he had to say. He referred to the non-quantifiable benefits, but I think he understated the case when he listed some of the quantifiable losses.

Sir Anthony Meyer: As we have been talking about non-quantifiable benefits, will the hon. Member for Swindon (Mr. Stoddart) and my hon. Friend the Member for Holland with Boston (Mr. Body) say whether they consider the impossibility of another war between France and Germany a quantifiable or non-quantifiable benefit?

Mr. Body: I should be out of order. Mr. Speaker, if I were to answer that question. But might I be permitted, in one half-sentence, to say that I should have thought that the danger of a third world war—which is not outside the realms of possibility in the next decade—would arise from an East-West confrontation. It would not be some parochial civil war in Western Europe. It would be something far uglier than that. It would be between East and West. The more we harden the barriers between East and West, as the EEC is doing, the more we enhance the risk of a total conflict in that sphere. I would rather deal with what we are concerned with this evening and touch upon some of the quantifiable costs.
The Minister of State used the phrase "downright perverse" to describe the way in which we are called upon to contribute


as much as we do to the Community budget. He said that there was no discernible resemblance to a nation's ability to pay. Those were apt words. But will they be matched by appropriate action? Time is running out for the Government. It is also running out for the country, if this haemorrhage cannot be stopped.
A few days ago the Chancellor of the Exchequer made the point that our outflow of wealth occasioned by the Community budget almost equalled the gains that we receive from North Sea oil. That is a most serious and grave fact. Any Government, whatever their colour, must act urgently to deal with that.
I shall now touch on one way in which the Community derives its revenue. If we must have some revenue, I would argue that VAT, undesi+rable though it is, is infinitely preferable to the present system of import levies. When our entry into the Community was negotiated, it was predicted that import levies would not be a serious burden to us. That judgment was perhaps right at that time. But things have changed considerably during the last few years and the burden of import levies is now considerable.
I am sure that all of us were concerned when, not so many months ago, the Prime Minister of Australia told an audience in London that because of the system of import levies no fewer than one-third of the dairy farmers in Australia had been driven out of business. They were farmers who had been able to send this country butter and cheese which, with the exception of that from New Zealand, was cheaper than that from any other country.
We know that thousands of beef cattle in Australia were slaughtered and the carcases burnt because we were not allowed to import them. We now know also that there are New Zealand farmers who are unable to borrow money from the bank or to face the future with any confidence because their butter and cheese can no longer find entry into our market.
I cannot see how any of my protectionist friends—and some of them are strong protectionists—can justify the way in which so many thousands of low-cost food producers in the world are being driven out of business because of the way in which the import levy system operates. We are called upon to operate the import levy system not only to our own detriment

but in a way which is utterly brutal to so many of our friends. Our own agriculture has been blighted by this system of import levies.
I am sorry that my hon. Friend the Member for Devon, West (Mr. Mills) is not here, because he has argued for our membership of the EEC on the basis that it provides a good opportunity for our farmers. He argued, as have other Conservative and Labour Members, that we should have further self-sufficiency and grow more of our own food. All these matters are carefully tabled year by year and published in the annual review of agriculture.
The review that has just been published tells us how we now stand, and how we have stood over the years, with regard to self-sufficiency. I want to take the average for the period before we entered the Community and were forced to adopt import levies. Incidentally, those levies are now operating more oppressively and at a higher rate than the Corn Laws ever did at their worst period. The average was 65·8 per cent. self-sufficiency for what is called "indigenous-type food supplies". In other words, they were the types of food that we could grow reasonably well.
After two years' membership, that percentage fell minimally by 0·3 per cent. It fell again in the following year by a very small amount. The estimate for 1978 is 66 per cent., which is an increase. But after all these years of oppressive protectionism, which has been designed to assist our farmers and increase our own food supplies, there has been an increase of only 0·2 per cent.
The reality is that instead of buying the food that we are not able to produce ourselves from the cheapest world producers, we have switched to the most expensive. It is impossible to quantify the appalling losses to the British people occasioned by the savage way in which import levies are now operating.
These levies are injuring our farmers—not the large, substantial arable farmers. Our agriculture has always had livestock as its principal sector. Usually, about three-quarters of the prosperity of our agriculture has been dependent upon livestock production. Since we entered the Community, one in 18 of our farmers has gone out of business. In the main, they have been small, full-time farmers who


have been engaged almost entirely in livestock production. They have gone out of business because for generations we have had access to cheap feedingstuffs for our cattle, pigs, poultry and the rest, and that is no longer the case.
They are now facing an import levy of 68 per cent. on maize, which is one of the most important of feedingstuffs. How can my hon. Friends, who so often try to justify this system, justify a tax of 68 per cent. on one of the most important types of feedstuffs, which often accounts for between 60 and 65 per cent. of the on-costs of a livestock farmer? No other business could bear that kind of taxation. We now know that wheat is taxed at over 50 per cent.

Mr. Gould: It is taxed at 100 per cent.

Mr. Body: Well, one must allow for the MCAs. It is true that it is knocking on 100 per cent., but I am being generous. One can afford to be generous to the EEC enthusiasts. We do not have to slither around with statistics. We can take the lower figure after allowing for MCAs, which is 50 per cent. That figure is considerably higher than it ever was under the Corn Laws. But it is not only the key foodstuff of the Western world but a vital ingredient in our animal feedingstuffs.
These import levies, which will continue under the present system of financing the Community budget, will not only be a most oppressive burden to the low paid, housewives and others who are sufficiently burdened by this taxation on food but will drive out of business many good and efficient farmers.
I realise that the enthusiasm of my hon. Friends has lessened.

Mr. Martin Flannery: I am sure that it has.

Mr. Body: We are gaining ground. The hon. Member for Sheffield, Hills-borough (Mr. Flannery), if I may say so, was not here earlier when we had evidence of that. If it were not for the CAP which gobbles up 73 per cent. of the budget, we should not be probing ways to raise more revenue for the Common Market, making it more unpopular than it is. Pro-Marketeers should join us and bring this absurdity to an end, so that the affairs

of Europe may be conducted more sensibly. If I may come back to the intervention of my hon. Friend the Member for Flint, West (Sir A. Meyer), it is urgent that we do so.

9.47 p.m.

Mr. William Hamilton: I appreciate the opportunity of being virtually the first speaker who is ardently pro-Common Market. I am unapologetic and unrepentant and shall make it clear in the next election that that is what I stand for. There are considerable warts and deficiencies in the EEC, but I adhere to that position.
Before going further, we should put the budget about which we are talking into perspective. Public expenditure in these tiny islands of the United Kingdom in 1978–79, at 1977 survey prices, was £60, 850 million. The EEC budget about which we are getting het up was about £8,000 million in 1978. The Community budget, as a percentage of the national budgets of the Nine, is less than 2½ per cent.
The anti-Marketeers have had a field day. They imply that on the basis of a five-year membership we should condemn the exercise, hook, line and sinker. In its historical perspective, this is nonsense.
My party has gone on the record as saying that if it does not get precisely what it wants it will be prepared to quit the EEC. The onus is on all those people who say such things to show, in that disastrous event, in what ways we would or could be better off. I believe that the reverse is manifestly true. Never again would our European partners trust us, and I do not blame them. We signed our name to a series of treaties. We had a referendum of our people, and those who suggested that we should have a referendum were those who emphasised that they would accept the verdict of the people.
Indeed, my right hon. Friend, if I can call him that, the Secretary of State for Energy used these words when he was a pro-Marketeer:
 In order to protect the small man from the big multinational companies, it is imperative that the small man should get behind him the big multinational political organisations.
That is as valid today as it was when he said it.
The explanatory memorandum issued by the Treasury indicates that this is an exploratory document—suggestions put forward by the Commission on whether the budget should be increased, if so how this should be done, and how it should be financed. It is for the Council of Ministers to decide whether the budget should be increased, at what rate, for what purpose, and by what means nationally. That is all that is in the document.
When my hon. Friend the Member for Swindon (Mr. Stoddart) bridled about a tax on energy, he should have remembered that our own Government are considering this. The proposal to switch the £50 road tax to a tax on petrol is an example of a tax on energy. Because the world is facing increasing energy problems, all Governments will have to consider such propositions in order to discourage the use of some forms of energy and increase the use of others. To use that as an anti-EEC argument is rubbish.
Reference has been made to figures put forward by Mr. Wynne Godley, of the Department of Applied Economics, Cambridge. He has calculated—and the figures have been quoted ad nauseam—that the Community budget costs us about £20 a head. There are people who challenge those figures—[HON. MEMBERS: "They are under-estimated, the Treasury challenges them."]—Whoever trusted the Treasury? When it helps the anti-EEC case, some of my hon. Friends quote the Treasury. I say that they should not trust the Treasury. Those figures were replied to in the form of a letter in The Guardian on 13 February—admittedly from a prejudiced source, Dr. Richard Mayne, head of the United Kingdom office of the European Commission. They were also forthrightly attacked by Woodrow Wyatt in the Sunday Mirror. In my view, the writer of that letter to The Guardian is as qualified as Mr. Wynne Godley to assess the figures. There are two views or more on the interpretation of these figures.
My hon. Friend the Member for Swindon made great play of the unquantifiable benefits. If my hon. Friend the Member for Swindon asked British Rail and local authorities in North-East Scotland what benefits they have received from the Community, he would discover how much money has been put into those areas.

Mr. Stoddart: Will my hon. Friend give way?

Mr. Hamilton: I know what my hon. Friend is about to say.

Mr. Stoddart: I, myself, do not know.

Mr. Hamilton: I shall quote some figures because it is important to quantify the benefits. Over the past five years there have been in grants for agriculture and other purposes and low-interest loans—at rates of interest that one could not obtain on the domestic market, but only by being a member of the EEC—of nearly £2,200 million from the European Investment Bank, the European Coal and Steel Community, the regional fund, and the social fund.
My hon. Friends must understand that if they put anti-Community arguments they must listen to the facts as I see them. My hon. Friend the Member for Swindon mentioned unquantifiable benefits. My hon. Friend the Member for Southampton, Test (Mr. Gould) referred to MCAs. I believe that they can be regarded properly as food subsidies and therefore direct benefits to the British consumer.

Mr. Spearing: No.

Mr. Hamilton: My hon. Friends must contain themselves. I shall get this on the record. There has been an equivalent of £1 million to £1½ million in subsidies—[Interruption.] I know that the subsidies are given to German fanners, but if we had had to pay in the form of depreciated British currency we would have had to pay £1 million to £1½ million extra per day for our food.

Mr. Gould: On the question of the monetary compensatory amounts, may I ask my hon. Friend to read the Hansard report of the debate on 13 December? It constitutes a complete rebuttal of the point that he has just made. Of course, the European Movement and other similar bodies make great play of loans and grants, and I do not dispute those facts. However, I draw my hon. Friend's attention to the equally indisputable fact that the net contribution for this year, having taken into account all those loans and grants, is £1,000 million.

Mr. Hamilton: Whenever my hon. Friend the Member for Test puts forward


a proposition it is indisputable, but whenever someone else puts forward a proposition he challenges it. I attended one of the debates to which he refers and spoke along the lines that I am now following. I was replying to the point made by my hon. Friend the Member for Swindon about unquantifiable benefits. In my own area there have been known and quantifiable benefits, and there has been regional assistance of one kind or another for hundreds of projects throughout the United Kingdom.

Mr. Stoddart: I have been listening intently to my hon. Friend and I appreciate that he is taking up my comments. However, as my hon. Friend the Member for Southampton, Test (Mr. Gould) pointed out, we are discussing the net contribution after the grants have been taken into account. Would not my hon. Friend consider that if we were not a member of the EEC there would be more than £1,000 million to put into Scotland as well as into my area, which has not received subsidies from the EEC?

Mr. Hamilton: I do not accept that for a moment. My hon. Friend puts these arguments forward as if they were based on incontrovertible hard facts. They are not. The further one gets from the first day of membership of Britain in the EEC, the more difficult it is to work out the facts in purely arithmetical, statistical terms. My hon. Friend the Member for Swindon made great play about unquantifiable benefits. My point is that there are also quantifiable benefits.

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,

That, at this day's sitting, the Customs and Excise Management Bill [Lords], the Customs and Excise Duties (General Reliefs) Bill [Lords], the Alcoholic Liquor Duties Bill [Lords], the Hydrocarbon Oil Duties Bill [Lords], the Matches and Mechanical Lighters Duties Bill [Lords], the Tobacco Products Duty Bill [Lords] and the Excise Duties (Surcharges or Rebates) Bill [Lords] may be proceeded with, though opposed, until any hour.—[[Mr. Bates.]

EUROPEAN COMMUNITIES (BUDGET)

Question again proposed, That the amendment be made.

Mr. William Hamilton: Our trade with the EEC has repeatedly been mentioned in the House and it is assumed that our trade balance with the countries of the EEC has suddenly become adverse because we are members of the Community. In fact, indirect benefits have flowed from our trade with the EEC. Our export trade with European countries has increased far faster than has our trade with the rest rest of the world. The Economist said a little while ago that if our exports to the rest of the world had increased as fast as had our exports to the EEC we would now have 500,000 more jobs in this country.

Mr. Flannery: The NEDC report last week pointed out that the special steels industry in Sheffield is in grave danger of collapsing because of the dumping of special steels by the EEC. There is virtual uproar in Sheffield over that. How can it be called trade when one of the greatest industries in the world is liable to be demolished and thousands of Sheffield workers may be put out of work because of the EEC?

Mr. Hamilton: That has hardly anything to do with the EEC. Everyone knows that if we had not been in the EEC and had faced the same sort of world recession as we have experienced and still had the same outmoded capital machinery and the same opposition to rationalisation which exists in the steel industry, it would be facing almost exactly the same difficulties as it faces today. Almost every steel industry in the world is facing those difficulties. It has little to do with the Common Market.
The hon. Member for Sheffield, Hallam (Mr. Osborn) knows that the problems of the steel industry are being tackled and can be tackled only on a European basis. We cannot solve them in a national context.

Mr. Cryer: Will my hon. Friend give way?

Mr. Speaker: Order. We have had 59 minutes of the case against the Common


Market from Government Back Benchers. The speech of the hon. Member for Fife, Central (Mr. Hamilton) is the first in favour. Speeches of Back Benchers will have to stop in exactly one hour to allow time for the winding-up speeches from the Front Benches, and there are still seven hon. Members, including the hon. Member for Keighley (Mr. Cryer), who will be trying to catch my eye.

Mr. Hamilton: I am glad of that assistance, Mr. Speaker. My arguments are as convincing as the rubbish that we have heard from anti-EEC members. They have done nothing to convert me. My right hon. Friend the Member for Batter-sea, North (Mr. Jay) spoke and his major point concerned the expenses and accounts of one of the Commissioners. I support him in that, but I wish that he would be as enthusiastic in supporting me when I point out that there are greater cases of abuse right at the top in this country than my right hon. Friend will ever find in the Commission. I have never heard him supporting me.

Mr. Jay: I believe that we get some benefit from having a monarchy, whereas we get nothing but damage from the Commission.

Mr. Hamilton: I disagree with my right hon. Friend profoundly, not for the first time. I think that the complete reverse is true. That is the difference between us.
As for the more important point raised by the hon. Member for Banbury (Mr. Marten), there is no argument about the power of the Council of Ministers to put a limit on how much the Parliament can increase the discretionary expenditure. It is written into the Treaty exactly what the powers of the Parliament are in this matter. It is a procedural problem which has occurred in the Parliament in the last few months, and it will be sorted out in a

reasonable way. There is no difficulty there. Whether the directly elected Parliament will increases its powers we shall have to wait and see. I might say, however, that if it increased them I should not lose any sleep.
We live in a world which grows smaller and smaller. We have to accept that sovereignty will go more and more to bigger and bigger international political units. It is a case of sharing sovereignty. We have seen this in a series of cases. NATO, the United Nations and all the other international organisations to which we belong voluntarily involve a diminution in our national sovereignty.
I accept, however, that the CAP is nonsense. I have made that clear from the start. But we can change it only from within. The Common Market and the association policies will go on, whether we are in or out. It has always seemed to me that we are much abler to make changes from within since we are members than to try to bellyache from the outside. If we go outside, the Community will put up the barriers against us and it will go on pursuing its own policies. It is better for us as a nation which believes in international co-operation and—my own party especially—the so-called brotherhood of man to be in an organisation such as the Community. After all, "man" does not exclude Germans or Frenchmen.

Mr. Spearing: The EEC excludes India, though.

Mr. Hamilton: That is no good reason against joining what is immediately available to us. It is imperative that we remain members of the organisation immediately available to us and which we have taken a decision to join, so that we can mould it as far as we can to our own requirements.

10.8 p.m.

Sir Anthony Meyer: I am glad that the hon. Member for Fife, Central (Mr. Hamilton) made that brief allusion to the Royal Family in the middle of his speech, because it relieves me and him of the embarrassment of my having to say that I agreed with every word that he said.
To my surprise, I find that I have no difficulty in accepting the amendment moved by the hon. Member for Southampton, Test (Mr. Gould). I agree that the allocation of contributions is unfair.
It is very easy to find arguments against the proposals contained in document No. R/3185. Many of my hon. Friends, notably my hon. Friend the Member for Blaby (Mr. Lawson), who are supporters of British participation in the Community are disturbed at the prospect that to provide the Community with more of its own resources inexorably will result in more public expenditure by the Community. They reject the proposition that the best way to ensure that Britain gets a fair return from the Community is to swamp expenditure on the common agricultural policy, since Britain is the largest food importer, has the smallest and most efficient agricultural population and must always necessarily be a loser, by a vastly increased expenditure in other areas, notably the regional policy, since Britain, as an outlying member of the Community, will always necessarily be a gainer.
That is a very dangerous road to pursue. I understand my hon. Friend's dislike of the proposition and, as a Conservative, I share it instinctively. I accept that the size of the public expenditure which would be involved if the EEC budget were to be expanded so that expenditure on agriculture became only a relatively small part of it would be very large. We would be talking about thousands of millions of pounds, not Britain's net contribution of hundreds of millions which has caused so much upset in the past.
For those who oppose the concept of British participation in the Community and who want to go back on the clearly expressed views of the British people in the 1975 referendum, there is no problem.

Much as Labour Members like public expenditure, they dislike the EEC more. They see votes in it—and goodness knows they need them. If they cannot get Britain out of the EEC, they will do everything possible to reduce it to impotence. They do not want the Community to have its own resources because that would enable it to become a true Community. They would like best, I suppose, for it to become a free trade area. I cannot see how that would bring us any benefit.
Free trade within the EEC countries would bring exactly the same adverse balance of trade about which Labour Members moan so much and there would be no corrective mechanisms at all, not even the present less than satisfactory ones. It is a mournful spectacle to see the British Labour Party, which, as the hon. Member for Fife, Central said, once claimed to be, and indeed was, the party of international brotherhood, now refusing, as a matter of principle, any attempt to set up and finance effective international co-operation and demanding protection and subsidy not only against the EEC but also against those very Third world countries whose desperate poverty one Socialist speaker after another used to invoke in many a tear-jerking speech.
Even supposing that permanent protectionism was a morally defensible policy—I shall argue that it is not—it is only conceivably practicable on an EEC scale. To argue for purely British protectionism, as many hon. Members on the Government Benches do, and to argue that we can protect and subsidise our steel, vehicle assembly and textile industries at a level which will save nearly all the jobs in those industries against competition from Eastern Europe, the less developed countries and from our EEC partners is not only preposterous nonsense; it is downright wicked. It is little wonder that a party which commits itselt to such drivel is held in derision throughout Europe and elsewhere. The only wonder is that hon. Members such as the hon. Member for Fife, Central can find themselves comfortable within it.
I do not want to end my speech on so distasteful a note. I began by talking of the misgivings felt my many of my hon. Friends at the prospect of hugely increased Community expenditure. Some may feel that I have dealt with this matter


in the manner of a Scots preacher who said "Here we come to an insuperable difficulty. Let us look it squarely in the face and pass by." I do not intend to pass by, and what I say may upset some of my hon. Friends.
There is not merely a political necessity to preserve and strengthen Community Europe which transcends economic requirements, however compelling. Only a united Europe can assure the survival of the nation States which compose it. I believe in something even more relevant to today's relatively limited debate. The only way in which the European nations can, in the long run, ensure full employment and rising living standards for their people in the face of revolutionary technological change—the silicon chip and its consequences—and in the face of dramatically increasing competition from developing countries is by a process of industrial retraining and reconversion on a scale far beyond the capacity or the imagination of any nation State today. I am arguing not just for a vastly expanded regional aid programme but for something very much bigger.
Technological change and competition from the Third world—let us not forget that the Third world is showing itself much readier to accept and take advantage of such change than most of the nations of the industrialised West—face us with a challenge not in the next century or decade but now, in 1979. We have already seen how the Davignon plan has offered a reprieve to the steel industry of Europe—although if the Labour Party behaves as it did the last time that we debated this on 25 January and rejects the means whereby the plan could be made effective, that reprieve will be brief indeed.
But without not just the Davignon plan but something going much further there will be precious few steel jobs in Europe by 1989. Without something much more ambitious and forward-looking than the multi-fibre arrangement, there will be precious few textile jobs. Without something similar for the motor vehicle industry, there will be precious few jobs there, too.
But even this is a mere short-term palliative. The point is that, without a gigantic switch of workers and resources from manufacturing industry into services, many of which—perhaps most of which—

will have to be in the public sector, the countries of Western Europe will be increasingly unable to keep their people at work, or fed, clothed or warmed. This great switch of resources is inconceivable on a national basis. It can be done only by the European Community, and only by a Community having large financial resources at its disposal.
The Labour Party finds it hard to accept the idea of effective international action, and action that necessarily requires a powerful dose of supra-nationalism. Many of my hon. Friends will find it hard to accept the idea of increases in public expenditure, whether national or international. If we both hold hard to our beliefs, it is all up with us, and quite soon.
We should do better to take notice of a man who stands further back than most of us and perhaps sees rather further than any of us—Mr. Harold Macmillan. At 85, he at least seems to understand the implications of modern technology and the shrinking capacity of national Governments to look after their citizens. He has said:
 But what is Europe really for? Because the countries of Europe, none of them anything but second-rate powers by themselves, can, if they get together, be a power in the world, an economic power, a power in foreign policy, a power in defence equal to either of the superpowers.
Then, with direct relevance to the problems of modern technology, he added:
 Then you've got all the new things that science is going to do…We ought to be thinking about making the machines work for us, instead of being their slaves. Not long hours of overtime but many short shifts to make the machine work, keep the machines 24 hours at work, to make it work for us. And then the problem will be leisure and travel and gardening and amusements for the people.
If Mr. Macmillan at 85 has the vision to look into the future like that, who will ever forgive us if we sit around squabbling about how much will be paid to Mr. Haferkamp or what the contribution will be to the common agricultural policy? If we do not face the future, we have little hope indeed.

10.19 p.m.

Mr. Bob Cryer: This has been an interesting debate. The weight of argument has been against the increase in budgetary powers proposed in these documents. With one or two exceptions, the Conservative Party is shifting slightly.


It does not seem to be able to bring forward any of that unstinting enthusiasm that it showed for the EEC before the referendum.
One thing which galls us on this side, and some hon. Members opposite, too, is the fact that the sort of matter that we are discussing now is what we predicted during the referendum campaign. We said that the Commission would be intent on seeking further powers, that it would not stop at the situation which existed in 1975 but would seek a greater proportion of the financial resources of this country.
There have been one or two voices raised by the Euro-fanatics and those who are critical of the EEC to the effect that the CAP takes too much money. My hon. Friend the Member for Fife, Central (Mr. Hamilton) said that, as did several Conservative Members who, until recently, have shown an undimmed enthusiasm for the Common Market. We shall not get changes in the CAP unless we fundamentally change the EEC. It is easy to say that that is our demand. Our Minister of Agriculture, Fisheries and Food is the best this country has ever sent to the EEC. He has done an excellent job. However, within the structure of the EEC the CAP represents a fundamental pivot. To change that would almost certainly bring about the alterations which would make the Community unrecognisable.
In Financial Guardian of 1 February, Wynne Godley says:
 The UK is the largest contributor (at £1,100 millions or so) by a long way. The only other net payers are Germany and Italy who each contribute £600 million to £700 millions. The largest net gainer is France who gets around £700 millions.
That is because the CAP is based on inefficient French farming. Is France likely to agree to changes which would savagely reduce the amount of the net contribution which she receives?
We have all said that things need to be changed and have made strong cases proving why such changes are valid. Over the years we have been progressively sucked into the EEC. The Labour Party did not want direct elections. We are to have them on 7 June. Direct election will not have any effect except to legitimise some of the things about which we are complaining. The power to legitimise

these actions will be sucked from this Parliament. That is why some of us talk about alterations to the European Communities Act 1972. This is not something which is hidden from those in executive positions. It has been plain and clear for many years during which we have been members of the EEC. Yet our position does not change in the radical way we suggest.
Already in document No. R/3185 there are suggestions for increasing the EEC budget. The betting is that the Commission will make those proposals, that they will come back here and that there will be pressure to have them accepted. I hope that we shall have a clear and unambiguous commitment to resist any changes in the budget as a start towards ensuring that real changes are made to the EEC. The only way we shall get such a change is to make it clear that if they do not come about we shall unilaterally withdraw from the Community.
In this document the Commission says:
 For the Commission, customs duties and agricultural levies belong irrevocably to the Community and should not be modified in any way.
That might be the position of the Community. We have to make it clear that our position is not irrevocable. The document goes on:
 The Commission also believes that VAT is a good basis for an own resource, for despite the limitations and problems of the existing situation it has the character of a tax which bears on the individual community citizen…In conclusion, the Commission again draws attention to the inevitability of the need for a decision, and to its expectation that additional resources will be required in time for the 1982 Budget. In view of this, and the need to allow time for the necessary ratification procedures at national level to be completed, the Commission thinks that a decision on the own new resources will be needed in 1979.
That is this year. We must make absolutely clear that we shall resist any attempt by the EEC Commission to increase the tax base, since not only would this be a further cost which we should have to meet it but it would weigh on our existing commitment.
I am not relying here on the Financial Guardian of 1 February. I am relying on Cmnd. 7405, "The European Monetary System", in which, at appendix A, there is a list of our net financial contributions calculated by the Treasury. It is interesting that the only year in which we received a contribution was 1975. Is


it not a strange coincidence that that was the year when we were "renegotiating"—I put the word in inverted commas—our position and we were to have a referendum? Although the EEC runs a comprehensive public relations department, with, no doubt, a lot of well-paid, sharp-suited gents busy spreading the EEC case in every nook and cranny of the country, the truth is that, whether it be a loan to the National Coal Board or a grant to a local authority, we make a contribution. After all the grants and other little titbits have been displayed the length and breadth of Britain, the contribution made by our citizens is never shown. It is cloaked and shielded by the PR men who now dominate the media, and the message, too, regarding the EEC.
In 1976 we made a net contribution, according to the Treasury figures, of £167 million, and in 1977 it was £369 million—I emphasise that this is after receipts. In 1978 the figure was £730 million, and for 1979 and 1980, at 1978 prices, the figures of net contribution calculated by the Treasury are £780 million and £895 million. It may well be that the Treasury took a conservative view of these matters, since it is not unknown for the Treasury and the Government to move rather closer towards the Community than the Labour Party would wish them to do.
In addition to the £1 billion or so which we contribute in cash terms, there is our contribution in trade terms. The hon. Member for Flint, West (Sir A. Meyer) spoke about this, as did my hon. Friend the Member for Fife, Central. The hon. Gentleman said that, of course, our turnover with the EEC has increased. That may well be so but, however much one's turnover increases, if one's expenditure increases at a faster pace it is an excellent recipe for having a larger deficit than one did before. That is precisely the position that we face. We face a deficit of about £2½ billion, and exactly as we must make an individual stand about the budget contribution so we must make an individual stand about the imports of manufactured and semi-manufactured goods, for if we do not we shall see the extinction of some industries in this country.
The truth is that the EEC simply does not have the machinery to cope with these matters, even if it wanted to, which one

greatly doubts. Some of our own civil servants, frankly, are not all that worried about some of our smaller industries disappearing, so I shudder to think what the bureaucrats of Europe see in their global view from their isolated eyrie overlooking the whole Common Market.
My hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) mentioned the position of Sheffield steels. I wish to speak now about the chipboard industry, a small industry employing only some 2,500 people directly and another 2,500 indirectly. What is 5,000 jobs? Of course, all hon. Members start thinking about jobs if they have cause to think about having to sustain them, and that is true also for all the people in the chipboard industry and the sub-contractors which supply that industry.
Belgium is dumping chipboard in this country. This is openly acknowledged by the Belgian manufacturers and it is understood and acknowledged by the British chipboard manufacturers. What is the advice of the EEC on this dumping which is driving people to the dole queues? It is to counter-dump, dump it back in Belgium. Our industry asks "What can we do? If we try to dump chipboard in Belgium, the distributors will be blacklisted." That is the situation that the industry faces. In the same way, we must face reality and be prepared to make an individual decision about the budget.
There has been reference to the multi-fibre arrangement. It is an arrangement that we negotiated with the EEC. It may be argued that if we were able to negotiate that, we may negotiate changes in the budget procedure. Alas, the MFA, which was negotiated with blood, sweat and tears as an attempt to achieve wider trade regulation with the EEC of the sort that I have advocated, was handled in a hurry by those inexperienced in trade negotiations. We were negotiating at second hand because the British delegation did not enter into negotiations.
What was the effect of the arrangement? The EEC changed its mind about some of the arrangements that were entered into. The quota arrangements—the basket extractor, as they are somewhat clumsily called—are not working as expected. What can we do about that? We cannot do anything. We are members and we have to accept the word of the Commission.
The MFA represents not an unreasonable principle that we should follow, but in practice it does not work out well within the EEC. Therefore, we must erect a clear marker. The marker is that our experience of the EEC has been more or less an unmitigated disaster. It has not been to the advantage of the British people.
Some Opposition Members are now manoeuvring themselves into criticism whereas they have always been sweetness and light and enthusiasts of the EEC. That does not apply to them all, but that has been the general rule. Criticisms are being expressed because we are moving closer to a general election. It is realised that, despite the result of the referendum, there are severe reservations underlying the view of the British people about the EEC.
We must make our position clear in the House. My goodness, how many times have hon. Members said in the Chamber, often late at night, that the House of Commons must not lose its power? They have said "We are a democratically elected body. We must be able to make decisions and influence matters." The response has been "Yes, we must retain those rights"; but we have seen them eroded month after month. The hon. Member for Harrow, East (Mr. Dykes) is shaking his head. Of course we have seen the rights of the House eroded.

Mr. Hugh Rykes: By the Government.

Mr. Cryer: No, by the EEC. For example, how does the hon. Gentleman expect the Government to negotiate unilaterally the application of temporary employment subsidy when the Commission is opposed to it? The Commission has said specifically that too much money is going to the footwear and clothing industries. Two of those industries happen to be close to my heart because they are in Keighley. It is no good the hon. Member for Blaby (Mr. Lawson) laughing. Many people work in those two industries, and I care about preserving jobs in them.
The Labour Government recommended to the Commission that TES should be continued to preserve jobs. It was the Commission, not the Government, that

insisted that TES should be reduced. Anyone who imagines that that is not so either does not understand or does not care to appreciate the truth. The reality is that little by little the EEC is modifying and moving the power of decision-making away from the United Kingdom Government and towards the Commission.
We must erect the marker—it will have to be tentative because we are not sure about the status of the documents as I understand that the budget has not been approved—that we shall not in any circumstances allow the EEC Commission any broader base of taxation. If the Commission wants to make any change, the best change would be on the lines of the radical proposals that we have put forward for reducing expenditure on the CAP, and those proposals should be backed by the threat of unilateral withdrawal if they are not achieved. That is what the Commission should do if it is really intent on a better order and system of priorities rather than with a shift of power. If that is what it really wants to achieve, it will do that. Before we in this Parliament make any move, let the Commission demonstrate to us first that it has the will and the ability to carry out changes to the CAP. That is the message which should go out from this House.
I know that only a few hon. Members are present, but the feeling in the country is unquestionable. I find it everywhere I go. When I talk to people, I find that they have reservations about the EEC. Those reservations should represent our marker tonight, and we must make it absolutely firm and clear. From that basis we can perhaps start to extricate ourselves from the mess that the EEC has got us into.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The House has already been advised that the winding-up speeches are due to begin at 11.5 p.m. There are still five hon. Members who are anxious to take part in the debate. I appeal for five-minute speeches in order to accommodate them.

Mr. Kenneth Clarke: It was predictable that the hon. Member for Keighley (Mr. Cryer) would conclude his speech by talking about reservations about our membership of the EEC. He is the


only speaker so far to have talked of the possibility of unilateral withdrawal from the Community, but that has lain behind the thought of several hon. Members who have spoken in the debate.
I share with the hon. Member for Swindon (Mr. Stoddart) the interest, and fascination sometimes, of these debates on European matters, but I wish that one day we could get beyond the basis of debate where all the time running throughout the entire discussion is the underlying theme of whether the question of our membership of the Community could be reopened. We divide on this issue into pro-Marketeers and anti-Marketeers in both the Conservative Party and the Labour Party, so that there are four broad camps. We simply fail as a country to make any useful contribution to the European Community, or to derive the best from it, while we continue to adopt attitudes towards Europe which are entirely based on a stale battle about whether we should ever have joined in the first place.
There are several issues on which all four of those broad camps seem to be capable of being generally agreed in discussing the documents before us without anyone conceding his enthusiasm, for or against the Community, on either side. The other member States sometimes have such difficulty in understanding the position of the British as members of the Community that we might do them a service if we underlined the matters on which we are all agreed, particularly after the absurd somersault that the Government have been through on the European budget, which my hon. Friend the Member for Blaby (Mr. Lawson) talked about earlier. I hope that the Minister will deal with it in his reply.
There seems to be universal agreement that the present system of assessing the budget contribution from this country to the EEC is not satisfactory and must be revised. The Government's attempts to renegotiate that part of the terms of our membership have failed, and it is plainly wrong that we should pay a disproportionate share of contribution to the total budget. This can be exaggerated, and it is possible to challenge what the hon. Member for Southampton, Test (Mr. Gould) said about the real weight that we should give to the MCAs. Nevertheless, obviously the British position should be

that we desire to see a system that is more related to the strength of the economies and the ability of individual countries to pay. We on the Opposition Benches deeply regret that the British economy has been brought to such low straits that we are one of the poorer members of the Community and need particularly to seek this adjustment.
Everyone is agreed that the common agricultural policy needs fundamental change. That cannot be brought about by the Commission, as the hon. Member for Keighley appeared to think. It is a matter for the Council of Ministers. But obviously something should be done about the excessive expenditure on agriculture and the accumulation of agricultural surpluses. Something akin to a price freeze is plainly needed. The British position can be combined with revaluation of the green pound and a move towards phasing out the MCAs.
This, it seems to me, is common ground. It is British policy. It is not a new discovery by the anti-Europeans, nor is it, as my hon. Friend the Member for Banbury (Mr. Marten) seemed to be suggesting earlier, some kind of lone battle that he has been pursuing for some years.

Mr. Marten: No, no. I did not suggest that.

Mr. Clarke: These are fundamental matters upon which we can all agree. The main difference between Conservative and Labour Members is that the Government have pursued these sensible policies so ineffectively that they have achieved absolutely nothing in either direction. We Conservatives believe that the absurd antics of the Minister of Agriculture, Fisheries and Food will achieve nothing on the CAP, and the Prime Minister will achieve nothing on the budget, until they are combined in some more sensible approach to our membership of the Community.
There are other matters on which there should be a sensible understanding. It is quite absurd if we have debates in the House and divide on the basis that all those who are pro-Community want a bigger EEC budget without limit and all those who are anti-Community want an ever smaller EEC budget in the hope of extinguishing it altogether. We Conservatives look at the budget of any public body—certainly the EEC—in the context


of our views on the reduction of public expenditure. But the way to approach any budget is to look, first of all, at the policy purposes which underline it, to decide what it is that one wishes to do at this level of government and to see what the resources of the economy will finance. I know that that is not an approach which commends itself to many Socialists, but there must be some who can see that the present position of the Government is arrived at by not adopting that approach.
Some policies of the Community that will be pursued will result in increased expenditure and will have non-quantifiable benefits. The obvious one is the enlargement of the Community, which is being pursued for political reasons to try to reinforce democracy in three applicant countries and to bind them closer to the rest of Western Europe. The enlargement of the Community to include those three countries will cost money and will require an enlarged budget.
I also believe—and this is one reason for ever joining the Community—that some policies are better tackled on a Community basis than on a national basis. Increased Community spending is, therefore, justified in those areas. Naturally, as Conservatives, we shall look for some corresponding reduction in national spending, where that is possible, if we are transferring to the Community responsibilities which we think are not adequately carried out at national level. Regional policy is one. I shall return to that in a moment.
In the context of what I have just said, the Conservatives certainly do not go along with the concept of "additionality" on the basis that we have enlarged and unlimited expenditure over and above national expenditure. I should like to look at additionality in terms of wishing to see a distinctive European policy which is not just a contribution to the British Exchequer, as the present British Government insist that the regional fund should be. A European policy in any field should be seen to be making some desirable Community contribution to solving our national or regional problems. I believe that that is attainable.
The basic policy decision that should be taken to improve our position in the

Community, and to get more out of it, is to shift the emphasis within the Community away from agriculture and to look towards matters of policy in the areas of industry and trade. We are an industrial and trading nation, and it is to those areas that we should look for substantial benefit. The policy of a shift away from expenditure on agriculture and an exploration of policies in the area of industry and trade should commend itself to Europe as a whole and certainly to Britain.
It is the present concentration on agriculture which causes the British budget contribution to be out of line. We get precious little direct benefit for our farmers from the agricultural policy. We are large-scale importers from outside the EEC, and so long as the present balance remains it is inevitable that we shall be a large net contributor.
We are not looking for unlimited expenditure on industry with the idea of getting a giant budget in an attempt to swamp the agricultural budget. One must cut agricultural spending. One would achieve very little in the Community, however, if one approached it solely on the basis of cutting agriculture expenditure and having no policy recommendations to make in any other area. The main target in the short term should be regional industrial policy.
My right hon. Friend the Member for Bournemouth, West (Sir J. Eden) said that there is a danger in Parliament if people pursue local issues. I represent a constituency in one of the few parts of the country which is not in an assisted area, and I therefore have no parochial interest in advocating a regional policy. But the main obstacles to the achievement of a genuine free market in Europe—and certainly the main obstacle to a genuine Europe-wide economy—are the great imbalances in the level of economic activity in different parts of the Community.
It is extremely difficult to harmonise our industrial, taxation, monetary, economic or any other policies when there are these great imbalances. The latest unemployment figures show that British national regional policy is doing nothing to cure the problem of our own national unemployment imbalances, which are getting worse. I believe that the resources of Europe are needed to do something about it, and to make some resource transfers


from the richer economies of the Community to the regions of this country.
I also believe that a European policy would cut out national competition in regional aids, which is at present so counter-productive and encourages a pork-barrel attitude among member State Governments towards regional policy. At present, multinational companies hawk mobile investment schemes around Europe looking for the highest bid from the Governments of member States. We are one of the poorer countries that will be outbid in any system of that kind, if it persists for long. I believe that a European approach is desirable.
What I therefore look for are some policy changes that will combine a sensible British position on agriculture and the budget contribution, on the one hand, with a constructive industrial and trade approach towards Europe, on the other. The Government have no such position. In November last year, they voted with Italy to increase regional spending. By February this year, they were lined up with Denmark and France in refusing to pay the contributions to the budget which a British Minister had brought into action. That was an absurd somersault.
They voted for increased regional expenditure until they alarmed their own side, because they suddenly realised that it might mean that good news would come from Europe to regional Labour seats. They then became panic-stricken about the powers of the European Parliament, aligned themselves with the French Gaullists and refused to pay the necessary contributions to meet what they had voted for. At present they are firmly in alliance with the Gaullists, and an alliance between the British Labour Party and the French Gaullists seems to be the silliest thing that has happened in politics since the Fox-North coalition. It seems to me that the present Prime Minister has a great deal in common with Lord North in a number of the policies that he pursues.
Nevertheless, the time has come for a more reasonable and constructive approach to Europe—one which does not simply deal with the fundamental question of our membership but which tackles the budgetary and underlying policy problems and looks to the question

how Britain can get the best out of a sensible European budget.

10.47 p.m.

Mr. Nick Budgen: It is clear that there is an important emerging alliance between what will be the European Parliament and the Commission. The object of the alliance is to increase the powers of the European institutions.
I thought that my hon. Friend the Member for Blaby (Mr. Lawson) made a splendid Gaullist speech in which he vigorously asserted our national rights, and most of all the Tory Party's continuing belief that big government does not work and that we must cut public expenditure. In making his vigorous speech, he rightly pointed most of all to the importance of the Community document "Financing the Community Budget—The Way Ahead". In that document, the Commission quite unapologetically pointed to the importance of expanding the Community budget. Just as the power of the House of Commons was expanded most of all by its fight with the Crown over expenditure, so the Commission clearly appreciates that it is by expanding their revenue, and increasing their area of activity, that the European institutions will grab power from the national institutions.

Mr. Lawson: I hate to interrupt my hon. Friend, particularly as he made some generous remarks about my contribution. He will probably agree that over the past 100 years public expenditure in this country has increased substantially. Does he believe that the power of this Parliament has increased commensurately over that period?

Mr. Budgen: No, I do not. I agree with my hon. Friend. But when the main power was held by the Monarch it was to some extent taken away by the control of this Parliament over expenditure. The move towards big government was well advocated by my hon. Friend the Member for Flint, West (Sir A. Meyer), who is an unrepentant believer in the Macmillan ideas of bigger and better government and more and more intervention. That is still an important force in the Tory Party, but I am happy to say that it is declining. It is now more sceptical about the benefits of big government.
My central theme is the danger of the alliance between the Commission and the Parliament, as it will become after 7 June. In the 1960s the Tory Party believed in big government and big government expenditure, but that belief has declined. Yet in a report of 7 February of this year we find—and this is not something that is known only by the Tory Party—that the whole United Kingdom delegation to the European Assembly voted for increased public expenditure and an enhanced regional fund.
It is plain that my hon. Friend the Member for Blaby is against that kind of expenditure, but why did my hon. Friends in the European Assembly vote in favour of increased expenditure on the regional fund? They were Tories and some of them were against increased public expenditure. But they were also members of the Assembly and they saw as their overriding objective increasing its power. They may have supported the Tory Party, the principles of smaller government and less public expenditure, but they were Europeans and voted in favour of enhanced expenditure on this regional policy.
That is the danger. Those who go to Europe regard themselves to some extent as on the make, grabbing power. In examining the proposals in this document, we must recognise that these people are seeking areas for increased public expenditure in regional policy, social policy or in their proposal for the right to search for oil and set up a European British national oil company. Those who serve in the European Parliament will in many instances abandon their domestic political philosophies and subjugate their main political interest to enhancing the power of the European institutions. I may have put it aggressively, but whatever our attitude to Europe we must beware of this, otherwise we shall lose much of the power of this place.

Mr. Deputy Speaker: The Front Bench speakers have kindly allowed another five minutes for Back Bench speeches. I should like to be able to call three more hon. Members in the time that remains.

10.55 p.m.

Rev. Ian Paisley: I wonder what would be the attitude in

the French Parliament if France had paid £1,000 million into the Common Market and got nothing out of it. The French people would not have thought that their politicians were committing an unpardonable sin by calling for France to quit the Common Market, yet hon. Members who call for the United Kingdom to quit in those circumstances are accused of committing such a sin.
We need to look the problems squarely in the face. I am the only Northern Ireland Member in the Chamber. Northern Ireland is on the periphery of the Common Market and is largely an agricultural province. It is suffering badly because of Common Market policies.
I was in the House when we debated the Bill that took us into the Common Market. Hon. Members who raised questions and queries were howled down and were told that the Common Market would be the be-all and end-all of good things and that we would all sail to prosperity.
Northern Ireland candidates for election to the European Parliament have changed their views—as have some hon. Members. The advocates of the Common Market, with all the wonderful benefits that it would bring to Northern Ireland, are facing the electorate and, in the light of some of the facts that have been spelt out in our debates, they have had to change their position. They want to be for the Common Market and against it at the same time.
Instead of talking about the alleged economic benefits, the advocates of the Common Market are now talking about preventing war in Europe, but I think that the Council of Europe is a far better forum for welding together the nations of Europe that do not want war. With respect to Mr. Macmillan, I want no part in building another super-Power. The world is sick of super-Powers. We need to see reason prevail in these matters.
I must declare an interest, because I hope to be a candidate in the European elections on an anti-Common Market ticket. If I go to the Common Market, I shall be raising my voice not to help the Commission but to debunk the fallacy that it takes 400 paid Members to do what 190 deputed Members used to do. It is time that we debunked the authority of the European Parliament and


established the authority of the sovereign Parliaments of the countries that make up the Common Market.

10.58 p.m.

Mr. John H. Osborn: I came to listen to the debate and to learn what hon. Members thought of the budget procedures. It has been a fascinating experience to learn how ill informed they are about what really happens.
As we were to debate the budget and the documents, it would have been helpful if the Government and Opposition Whips had asked my hon. Friend the Member for Scarborough (Mr. Shaw) and the hon. Member for West Lothian (Mr. Dalyell) to be here to account for what they had done in the budget committee and their work with the Members of the European Parliament who were concerned with this matter.
The budget committee is concerned with the allocation of expenditure. Once it has been decided what the expenditure should be, obviously the revenue must match it. I have been a Member of the European Parliament for four years and I could comment on the complexity of the voting procedure. My hon. Friend the Member for Banbury (Mr. Marten) asked for a recorded vote on every occasion. Last December there were 130 votes. The European Parliament likes to get through them in two or three hours. We do not like to spend nights debating, as we do in this place, because many of us want to return and make our contributions in debates in this House.
I am glad that the hon. Member for Fife, Central (Mr. Hamilton) brought up the real issue of the Community budget. The budget is only 2·5 per cent. of the expenditure of all the Community countries collectively. It should be borne in mind that the Commission has to look after the budget. The Civil Service of the Community is a little smaller in size than that of the Scottish Office.
During debates on many issues in the European Assembly that I have attended, the Social Democrats and their Labour Party colleagues frequently have asked the Commission to take on more tasks. If the Commission takes on more tasks, it needs more staff. If it needs more staff, it needs more money. Perhaps one should analyse what hon. Members on the Government Benches and the Social Demo-

crats have said in order to discover the extent to which they have been in conflict with a Conservative group which has been in a minority on the extreme right of what we call the Hemicycle.
One of the documents that we are discussing deals with expenditure on fusion and the transfer of activities to Culham. I should like to see larger Community expenditure in that area and less of the duplication and competition which result in a greater total expenditure, taking the aggregate of expenditures by the national Governments. Greater Community expenditure would reduce the aggregate of duplicated national expenditure. That is an example of how the Community can work more economically and effectively for the benefit of the people.
I cannot develop my argument on energy. I shall not exceed my time. However, I should like to refer to three matters—intra-Community trade in coal, the financing of coal stocks, and the burning of coal in power stations. Surely, there is a good case for encouraging countries to burn more coal in power stations. There was an argument—even within the Conservative group—that where there are power stations that could be readily converted to coal in Great Britain they should be so converted. However, the Danes felt that they would not benefit from that because they have no coal. These are the difficulties that arise within the Council of Ministers and within the parliamentary committees.
I should like to end upon the important issue of the scale of the British contribution as it has increased in the last three years and the benefits that we have received from the corresponding monetary compensatory amounts. I hope that the Minister will make clear the scale of the British contribution. Great Britain is at a disadvantage, because it has to import so much of its food. However, this is a matter for negotiation and it is right that it should be raised in the House. I, for one, with another three months in the European Parliament, will take note of the views of the House on the matter and will try to influence my colleagues in the member countries.
I thank you, Mr. Deputy Speaker, for giving me the opportunity to take part in the debate, having made a similar contribution in the European Parliament. I assure my hon. Friend the Member for


Wolverhampton, South-West (Mr. Budgen) that I am out not to grab power but to serve this country in the European Parliament.

11.5 p.m.

Mr. Roger Moate: I wish to direct my few remarks to document R/3185, "Financing the Community Budget—The Way Ahead." Despite appearances to the contrary, the debate on it has not been about the principle of membership of the Community, it has been about the very nature of the Community. It has concerned the resources available to the Community in future and, because of that, the powers of the European Assembly.
Whatever our arguments about our membership, we are entitled to look back at the bargain that was struck with the British people about taxation. Throughout the referendum campaign and all our debates it was made quite clear that the European Community would be limited in the resources that would be available to it. The resources were to be the customs levies, the agricultural levies and, ultimately, own resources coming from 1 per cent. of value added tax. That was clear and precise. There was no doubt about it. That is the bargain which was struck when Britain entered the Community, and I can see no grounds for changing that proposition.
I regard document R/3185 as one of the most presumptuous ever to be put before the House. I refer to it briefly, emphasising again that the 1 per cent. VAT own resources was the limit of the British people's commitment. It says:
 And it is not acceptable that the present 1 per cent. rate of VAT should constitute a ceiling on Community expenditure.
But that is the ceiling on Community expenditure, and that is the basis on which the Commission is engaged and employed. It is presumptuous in the extreme for it to go on to say:
 For all these reasons, there is no doubt that new revenue will be needed. The only question is when.
The answer to the Commission ought to be "There will be no additional resources, and it is your task and duty to manage within the existing provisions."
Many of my hon. Friends who are passionately in favour of membership

have said that they are also in favour of reform of the common agricultural policy, but the only way in which they can secure that reform is by imposing limits on the Community budget. If the Community wants to spend more money on regional aid, on research and on scientific work, it must find the necessary funds from the existing budget. That is the imperative which will force it to devote less of the budget to the CAP.
By giving the Commission what it asks for, which is the development of Community VAT, which will place even more power in the hands of the European Assembly, we should be giving it the opportunity to carry on the CAP as it is operating at present. At a time when the British people know that the Community is costing them £1,000 million a year net and very much more than that in terms of the effect on their standard of living, for the Community to say that it is suggesting a Community VAT or a Community tax on petrol and alcohol, which is what it is proposing in this document, is presumption in the extreme.
While not begging the question about Community membership, I should have thought that most right hon. and hon. Members and the two Front Benches ought to be able to combine and say "No. There is no question of new resources being made available. The cash limit on which we are all agreed shall be applied absolutely. It is no good your saying that it will not be enough because, for example, there are additional costs involved in enlargement."
My hon. Friend the Member for Devon, West (Mr. Mills) argued the case for a greater national emphasis on agricultural policies. The lesson that we must learn from enlargement, if we are to deal with the problems of Greece and Spain, is that we should have national policies to do so. That is the way in which we can reduce the cost of the CAP within the existing budget.
Without raising the fundamental question of membership, I say that the task of the Community must be to manage on its existing resources. I hope that the message from this Chamber will be that if the Community comes forward with a proposal in 1979, as it says it will, for new Common Market taxation, the answer


from the House of Commons will be "No, no, no".

11.10 p.m.

Mr. Lawson: As my hon. Friend the Member for Faversham (Mr. Moate) said, the House has spoken with a certain degree of common misgiving about some of the proposals implicit in this Green Paper from the Commission and about the idea of enlargement of the Community budget on the basis that seems to be implied in that document. I believe that that will be noted. I think that it should be noted, together with the taxation policies that flow from it.
I share the regret of my hon. Friend the Member for Rushcliffe (Mr. Clarke) that there was not a greater attempt to make common ground, of which a great deal exists in this House, over what British policy should be within the Community. There was far too much fighting over the old ground of whether we should be in or whether we should withdraw. This is sterile and unhelpful. The remarks of my hon. Friend the Member for Rushcliffe should be pondered.
I want to be brief to allow the Minister to reply to the many points that have been made. I would like to comment on the separate but important points made by my right hon. Friend the Member for Bournemouth West (Sir J. Eden), who had misgivings of a different nature, which many of us share, about certain procedural aspects of the budgetary mechanism at Community level. I hope that his remarks will also be pondered. I would like to apologise for not having commented in my opening remarks on the invaluable work of the Scrutiny Committee under his chairmanship which is of great assistance to all of us who try to follow Community affairs.
I made clear the position of those on the Opposition Benches in my opening remarks. I would like now to make one further point to the Minister. We accept and believe that membership of the European Community is profoundly in this country's interests, despite all the misgivings that I have spelt out about this document. However, the position of those on the Government Benches is not quite clear. The hon. Member for Keighley (Mr. Cryer) said, in ringing tones, that unless there were radical changes in the CAP and maybe also in

other matters, Britain should withdraw unilaterally from the Community. I would like the Minister to say clearly whether that is the policy of the present Government and, if not, precisely where the Government stand. I hope that he will be able to make common cause with us and not with his hon. Friend the Member for Keighley. It is important that that point should be put on the record.

11.13 p.m.

Mr. Denzil Davies: With the leave of the House, Mr. Deputy Speaker, I would like to deal with some of the points that have been raised. My right hon. Friend the Member for Battersea, North (Mr. Jay) asked about the Commission's salaries. He will be pleased to know that a kind of comparability study does take place. The Commissioners' salaries are fixed with reference to the highest grade of Commission salary. The latter are themselves recalculated by the Commission each year taking into account rates of inflation and Civil Service salaries in member States. I understand that they are then approved by the Council. At the end of the day, the Council has a power over the Commission's salaries.
The hon. Member for Sheffield, Hallam (Mr. Osborn) asked me to make clear what was the budgetary cost to this country of membership of the European Economic Community. The figure has been mentioned in this debate. I will give it again. It is a net contribution, in 1979, of about £1 billion. That is the budgetary cost. I think that most hon. Members know that figure, but it is worth reiterating it in the House.
My hon. Friend the Member for Birmingham, Handsworth (Mr. Lee), who apologised to me for not being able to be present for my winding-up speech, asked a number of questions. He asked me to comment on some of the suggestions made by the Commission for raising extra money. I will deal with this matter briefly. The Commission has suggested a cigarette duty. As I said in my opening speech, that would be a very regressive form of tax, and we do not favour it. An alcohol tax would be impracticable because there is no harmonised base in the different countries. There are problems with a tax on energy. Not only is there no harmonised base; it would be perverse to try to increase


revenue by taking energy when we are trying to conserve it.
As for corporation tax and income tax, apart from the fact that there is no harmonised base, real questions of economic sovereignty are involved. Once one thinks along those lines, particularly with income tax, one is dealing directly with sovereignty and control of economic power. All those suggestions are wide of the mark. There is more to be said for the suggestion of VAT as a form of revenue. There are fewer arguments against it.
The hon. Member for Blaby. (Mr Lawson) made an extraordinary speech. One detects among Conservative Members a movement away from the support they gave to the way in which we negotiated our entry of the Common Market. The hon. Member must be in some difficulty. He believes that public expenditure should be cut, and this is one area of public expenditure that he cannot cut because it is not within the power of a British Government to do so. It can be cut only with the agreement of eight other nations. This is one area which a Conservative Chief Secretary, however zealous—I do not know what the aspirations are of the hon. Member for Blaby—would not be able to cut.
The hon. Gentleman gave qualified support to the Minister of Agriculture in his negotiations but, as always with the Opposition—certainly the Front Bench—the support is niggling. He said that he was generally in favour of what my right hon. Friend was doing, but went on to say that the British Government's stand on the budget was illegal. The hon. Member for Rushcliffe (Mr. Clarke) said that we should take a more reasonable and constructive approach. What they are often saying is that we should cave in, that we should not stand up for British interests. If the Opposition Front Bench stood up for British interests and supported us when we did so, instead of taking a niggling attitude, we might get the changes in the Community that we are looking for.

Mr. Kenneth Clarke: Would the right hon. Gentleman say when Ministers were standing up for British interests? Was it when they voted with the Italians to increase the regional fund in November or

when they stood with the French to refuse to pay the bill in February?

Mr. Davies: That shows the considerable ignorance of hon. Members of how the Community operates. I will say exactly what happened. The President of the Assembly declared unilaterally that he was adopting the budget. He knew very well that he could not adopt the budget without agreeing a new maximum rate, and the new maximum rate has to be agreed between the Assembly and the Council. The President of the Council, in December, on behalf of all members—[Interruption.] Even if the hon. Gentleman does not like the answer, he still should not mutter from a sedentary position. The President said that the budget had not been adopted in accordance with the Treaty. That was the view of the whole membership of the Council.
The next question was, how should the contributions be made, following the unanimous decision of the Council that the budget had not been adopted? The British Government took the view, rightly in law, that if a budget were not adopted the only way in which we could contribute was on the basis of one-twelfth of the draft budget of the Commission.

Mr. Lawson: That is not quite right. Will the right hon. Gentleman now answer the question that was put to him, instead of trying to disappear in a fog of evasions and obscurities? Why did the Chief Secretary vote as he did at the meeting of the Council of Budget Ministers on 20th November?

Mr. Davies: That meeting was concerned with many items of expenditure and obviously one has to take a view on each item. This problem arose because the President of the Assembly unilaterally adopted a budget when he had no authority to do so, when there was no agreement on the maximum rate. That is provided for in the Treaty.
The hon. Member for Blaby should not stand at the Dispatch Box calling on all his legal experience and knowledge and saying that the British Government's action was illegal. That, again, is an example of how, on the one hand, the Opposition say "Stand up for British interests" while, on the other, they niggle at us all the time, making it much more difficult for us to do so.


It is right to say that this document is concerned only with a part of the contribution to the budget. It has nothing to do with agricultural or customs levies. Whatever happens, whatever we do about this part of the budget, we shall still have the problem of the agricultural and customs levies, which form a major part of our contribution to the EEC.
I return to the document. It must be made clear that the House will have the complete power to accept or reject anything put forward. First, any agreement on increasing own resources will be an extension of the original agreement, effectively a new treaty. That will have to be agreed by all member States in the Council of Ministers. The British Minister, whoever he is at that time—if the time ever comes—will have a veto and will be able to use it against the new treaty. If he decides not to do so and proposals come to this House, almost certainly those proposals will have to be ratified, at least by affirmative resolution of both Houses and, if it means increasing revenue in different and new ways, possibly by new legislation.

Mr. Budgen: I am sure that the Minister has it in mind that document No. R/3185 says, on page 4, that it is proposed that the Commission should make its application in 1979. This is an urgent matter.

Mr. Davies: The Commission believes—we do not necessarily share this view—that by 1982 it will need extra revenue. It believes that, because of the processes of ratification that have to be gone through, it had better get a move on.

Mr. Jay: My right hon. Friend says that this issue will have to come back to this House for a final decision. Will he tell us now what is the Government's attitude? Can he not say that the Government will definitely not agree to further increases in expenditure?

Mr. Davies: May I come to that point in a moment? It is only fair not to give the impression that this document calls for any decisions now. The document will be discussed with other documents. Other Governments are not keen to pay more money to the Commission. The same pressures we have seen tonight will apply to other countries. If, after further consideration of these proposals, the

Commission puts forward a paper, it will be that which will be considered in the House. It is at that point that the Government will have to make a firm stand and commitment. Once that paper has been agreed, the issue will still have to be agreed by the Council of Ministers. The British Minister will have a veto. It will then have to come back to the House, where it will be subject to a vote. At the end of the day, therefore, the power over those matters lies with the House of Commons. There is no question about that. One should make that absolutely clear.

Mr. Cryer: Does my right hon. Friend appreciate that the House of Commons—certainly the Labour Party—would prefer the Minister to come here first with the proposals, because there is a suggestion by my right hon. Friend the Chancellor of the Exchequer that the Minister makes his decision at the Council of Ministers and then comes back here with a fait accompli? My right hon. Friend knows that when that happens the Government expect some of us to troop into the Lobby behind their decision. We want the decision made here first.

Mr. Davies: I can give my hon. Friend the assurance that the proposals will be brought back to the House first and they will be debated in the House first. Obviously, Ministers will have to take a view and take account of what the House says and does. It is after that that the matter will be debated in the Council of Ministers, and at that point there will be the ultimate sanction of the veto, if it is decided to use it. Then, if it is not decided to use the veto and there is agreement in the Council of Ministers, it will have to come back to the House again to be ratified as a treaty, and any consequent legislation will have to be passed by the House. So the power ultimately rests with the House of Commons. The House could stop this thing if it wanted to, and it could agree to it if it felt that it was in the interests of this country.
The message which I get from the House tonight it fairly clear: that there is considerable scepticism, to put it mildly—there is general agreement between the two sides—about the need for this extra money. Certainly, the Commission has not proved its case yet. In fairness to the Commission, one should say that this is


a Green Paper. The Commission has not set out the arguments and the figures on which it seeks to argue that it needs this extra money by 1982. We hope that the next document that it puts out as a result of the meetings and deliberations will show quite clearly on what assumptions and figures it says that it will need the extra money by 1982, but at the moment the case is not proved.
As far as I can see, having listened to the debate, the House has considerable scepticism at the moment about the need for extra money, and many hon. Members, of course, would feel that even if the Commission could prove its case on that there would still be a case for not voting the extra money because of the other imbalances in the budget on the customs duties and agricultural levies.
We have listened carefully to the debate. When the Finance and Foreign Ministers' meeting takes place in April we shall make sure that the Commission has proved its case, bringing forward its figures and trying to convince everyone that it has a case for getting this increased revenue. But then it will have to put forward a paper which will be debated in the House, and all the other procedures will have to be gone through. The safeguards are there, and at the end of the day the House will decide.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved,

That this House takes note of EEC Documents Nos. R/3185/78, R/3089/78, R/3090/78, R/3093/78, R/3146/78, R/3312/78 and 4102/79 on the Communities' Budget but notes the regressive and inequitable operation of the present system of financing the Community Budget and urges Her Majesty's Government, in negotiating on any Commission proposals, to press for a system of financing the Budget which contributes to reducing the present disparities and to bringing the level of net national contributions into line with ability to pay.

CUSTOMS AND EXCISE MANAGEMENT BILL [Lords]

Order for Second Reading read.

11.28 p.m.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move, That the Bill be now read a Second time.
This is the first of seven Bills which together consolidate most of the law of Customs and Excise and which are due to have their Second Reading today. It may be convenient if, with the leave of the House, I briefly refer to all seven of these related Bills at this stage, and then perhaps I may move the rest formally.
The largest of the Bills, the Customs and Excise Management Bill, deals with the administration of the collection and management of revenues of customs and excise and with the overall administration of customs and excise.
The Customs and Excise Duties (General Reliefs) Bill consolidates enactments relating to general reliefs from customs and excise duties.
There are four Bills which deal with the individual excise duties on, respectively, alcoholic liquors, oil, petrol and similar fuels, tobacco products and lighters, and finally one Bill consolidates the so-called regulator power by which the Chancellor of the Exchequer may by order vary the rate of certain duties.
As the House will appreciate, this is a mammoth piece of consolidation. I pay tribute to the Law Commission and, in particular, to the parliamentary draftsmen who have completed it. All the Bills have been to the Joint Consolidation Committee and have received its approval. They are pure consolidation and make no change in the existing law.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

CUSTOMS AND EXCISE DUTIES (GENERAL RELIEFS) BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

ALCOHOLIC LIQUOR DUTIES BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

HYDROCARBON OIL DUTIES BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

MATCHES AND MECHANICAL LIGHTERS DUTIES BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

TOBACCO PRODUCTS DUTY BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

EXCISE DUTIES (SURCHARGES OR REBATES) BILL [Lords]

Read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Tinn.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

EXPENDITURE

Ordered,

That the Standing Order of 18th November 1974 relating to the nomination of the Expenditure Committee be amended, by leaving out Mr. Bryan Davies and inserting Mr. Donald Dewar.—[Mr. Tinn.]

FISHING INDUSTRY (HULL)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

11.41 p.m.

Mr. James Johnson: Tonight I am pleading the cause of many hundreds of fishermen and their families. These men have fished in the Arctic for decades, as have their fathers and forefathers. They now see the world as they have known it, and their livelihood, disappearing, so that this is a very serious matter for the people in Hull.
I can only begin with a gloomy catalogue of history, which I will cover as quickly as possible. It is not pleasant, but it is not made any better by the continuing deadlock at the EEC Council of Ministers. There is no settlement there and this denies us even a meagre share of any quotas which may be negotiated with third countries, such as Norway and the Soviet Union.
Before I come to the position in the dock in Hull, Mr. Deputy Speaker, I ask the Minister—I do not intend to argue or to say anything more than this about it—whether he will be kind enough to say something about decasualisation. I am informed by my local union members and others that things have moved of late a bit more than they have for some months past. As he knows, this is a delicate and a sore point with the fishermen.
I came to Hull about 20 years ago and found well over 130 boats in the dock, with well over 600 bobbers or dockers to unload the fish. This was a place of cheerful noise and jolly activity, despite the low wages that the men received. The landings were well over 200,000 tons, mainly of cod and haddock. Today, there is one vessel landing in the dock in a fortnight. The "Lord Nelson", earlier this month, was a classic example.
Five years ago there were 2,000 fishermen on the deck. Today there are just over 1,000 on the unemployment register, and well over 50 per cent. of those are unemployed. The decline is continuous month by month. The freezer fleet has exhausted its meagre quota off Norway and is moored peacefully in Albert dock. Some have been exported to the Third

world. Some, alas, will find their way to the yard to be smashed in pieces.
Where can our men fish now? There are at least eight wet fish vessels operational, but where can they go? There is nowhere for them to go. They are barred off Iceland, they are barred off Norway, and they are barred in the White Sea. It will take time, as a long-term objective, to establish fishing in, say, the South Atlantic. We are barred, of course, from the North Atlantic.
This scheme was put before the Minister of Agriculture, Fisheries and Food, who sent me a most helpful letter saying that he will set up a desk study to find out the possibilities, after consulting the work and findings of Polish, German and other fishermen who have been in the waters around the Falkland Islands.
Yet there is money in Hull for new vessels. In Fishing News International I read about a vessel, a purse seiner, 225 feet long, which is due to be completed this month. This ship, which is for Thomas Hamling and Son, of Hull, is at present at a shipyard in Norway and will cost over £4 million. This company may be in league with the Norwegian consortium, but nevertheless that is the position.
I shall quote from Fishing News International:
 Signs that the Humber is set for a big investment in new boats also came from Boston Deep Sea Fisheries at Hull…. The 105 foot vessel…will be one of the most sophisticated ever built in this class.
So there is money in Hull, which was made in the past, but it will not be spent in a way that some of us would like. The owners wish to be on to a good thing, and we now conclude that they are counting on a middle water fishing fleet, unlike that of the past. Even so, that fleet may not fish out of Hull, because if much of this money is Norwegian it may have a Norwegian base to fish for blue whiting or whatever off the north coast of Scotland.
Topsy-turvydom continues in our dock. This month, three Icelandic vessels came in and made about £150,000 with about 5,000 kits, while our own boats were catching colossal amounts of mackerel off the Cornish coast.
I am not a lover of industrial fishing, but I accept the common sense of our


men fishing in our waters for our fish and making money by selling them to Communist States that have their boats anchored outside Cornish ports, such as Falmouth. Why should we not catch this mackerel and fetch it back to Hull for processing in famous firms such as Birds Eye and Findus, so that we can have it for food later?
What can the Government do in this appalling mish-mash? Can they help us with finance? For example, the new Albert dock, into which we moved from St. Andrew's dock, was always a source of misgiving, and many men thought that this would be a millstone—as it is undoubtedly proving to be, because of the expensive dues in the new dock—round the necks of the firms.
There are massive capital services here, possibly—I stand to be corrected—£1 million per year. These dues are expensive, and the fewer vessels that go into the port, the more each vessel must pay as a charge for entry to that dock. The only area that benefits from this is the Grimsby market further down the estuary. If there are no boats there in 12 months' time—which many local people believe will be the position—why not examine the debt charges now and ask the Docks Board to do something about it to help us?
The distant water fleet as we have known it is now finished. There are waters into which our boats could go, but here again we need Government help. Our boats could fish off West Africa and, as I said a few moments ago, in the South Atlantic off the Falklands. But undoubtedly we shall not get into Norwegian or Icelandic waters because one reads in all the periodicals that the Norwegians are cutting back on their own quotas. They are anxious about their own stocks, as are the Icelanders.
No fisherman that I meet in Hull, be he skipper, deckhand or owner, thinks that Iceland will allow us back. I cannot see the Icelanders giving away their stocks, because they are cutting back on their own domestic cod fishing. The best that we can hope for is middle water fishing. Where do we go? I have here a publication of the Lowestoft laboratory, in which we are told about the blue whiting stocks off the west coast of Scotland. I should like to quote from page 6, which says:

 Not only is this species virtually unexploited, but the spawning aggregations to the west of Britain are accessible to large trawlers and are mostly contained within the EEC 200 mile limit.
Further on, it says that
 there is in excess of 10 million tonnes of blue whiting in the area at the peak of spawning.
It goes on to state that
 95 per cent. are between 27 and 35 cm. in length, with a mean of 30 cm.
These are not sprats, they are good fish. Hull firms such as Boyd have been to these waters. They tell me that they lost £250,000 because of worms inside the fish. Does my right hon. Friend believe as we do, that it is commercially viable to fish in these waters? Skippers tell me that there is such a density of fish that they must get them on the move. Such a thinning-out process does the fish good, in the sense that these specimens are not worm-infested.
I want to say a few words about industrial fishing. I am not a lover of it. I would much sooner see us catch fish for the table or which went to Birds Eye and other big firms to be made into fish fingers. This would give work to my own constituents—members of my own union, the General and Municipal Workers—who man these factories. Therefore, I would sooner have us catching fish for consumption.
Three-quarters of the fleets of Norway and Denmark are engaged in industrial fishing. Fishmeal is vitally important to us, because it helps our balance of payments and is invaluable for our farmers. I ask my right hon. Friend to think seriously about giving the Hull boats a transport subsidy to go fishing for blue whiting off the north-west coast of Scotland. Boats would then be at sea, men would be on the decks, and fishmeal and fish fingers would accrue. I hope that he will consider this suggestion seriously.
I should like to supply my right hon. Friend with some figures. Last year, the Norwegians caught 100,000 tons of blue whiting. I understand that this year they are aiming at 200,000 tons. If our Government were to give a subsidy of, say, £8 or £10 a ton, and we caught 100,000 tons in an eight-week season, about 10 vessels could catch 10,000 tons each. If 200,000 tons was the target, 20 vessels would be able to fish. Simple


arithmetic indicates a £1 million subsidy for a catch of 100,000 tons, and £2 million for the larger catch of 200,000 tons.
Something must be done soon. If not, no boats at all—not even the "Lord Nelson"—will be coming into the dock in Hull in 12 months' time. Owners whose object in life is to make profits say that they cannot fish economically in these waters without a subsidy. They will have no compunction about leaving Hull and fishing from another port, or even fishing out of Norway with Hamling's big purse seiner. It will leave 600, 800 or 1,000 fishermen in Hull unemployed. There will be a diminished income in docks because there will be no boats to pay dues.
What are fishermen worth? We subsidise and help other industries. In the past we have subsidised fishing in the Arctic, though we did not pay so much per ton. We had an operational subsidy on days at sea. Past Labour and Conservative Governments have given aid. Can we have help, so that we can fish off the Hebrides or West Africa, or in the future have a long-distance South Atlantic fleet fishing with a base at Stanley, in the Falkland Islands?

11.57 p.m.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): The advocacy of my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) on behalf of his constituents and Hull's fishing industry is well known and appreciated locally and nationally. It is nearly midnight, and I am pleased that my hon. Friend the Under-Secretary of State for Scotland is present, indicating his concern and interest on behalf of the Scottish industry. It is unusual to have two Ministers listening to such a debate.
I am grateful for the opportunity to detail the action being taken and anticipated to be taken to help the United Kingdom fishing industry and to assist the local situation to which my hon. Friend refers. I know of his long and continued concern for the well-being of the fishing industry.
I shall begin by commenting on the assistance that my Ministry has provided and is continuing to provide to the Indus-

try. I make special mention of the expenditure on research and development, the grants and loans for the construction and modernisation of fishing vessels, and the assistance towards enforcement costs. My hon. Friend referred to the publication from the Lowestoft laboratory and the research into blue whiting. We are spending about £20 million per annum on this aid to the industry, largely to sustain it during the review of the common fisheries policy.
Additionally, the Government have recognised the special difficulties of the deep sea sector at Hull, Grimsby and Fleetwood. On 7 December 1978, in reply to a parliamentary question, the Minister announced a temporary scheme of assistance towards the dock charges incurred in 1978.
My hon. Friend will be aware that the Minister referred to changes in the traditional pattern of fishing which have had serious repercussions on the dock and landing charges payable to the British Transport Docks Board by fishing vessel owners in Fleetwood, Grimsby and Hull and he proposed, as an exceptional and temporary measure, to seek the approval of Parliament for a scheme of financial aid to cover about half the charges for 1978 in respect of vessels of 80 ft. registered length or more, based on those three ports. That is an indication of our concern and willingness to help the industry.
My hon Friend rightly referred to the state of the industry at Hull. The Government are well aware of the substantial decline which has taken place in landings at Hull. That is one reason why the Minister announced the dock charge subsidy. The Government will also have the situation facing the deep water sector and the labour-related problems very much in mind during their consideration of the proposals submitted by the fish catching industry.
As to whether there will be a dock charge subsidy in 1979, I can only say that the scheme was clearly related to dock charges incurred in 1978 and was described by the Minister as an exceptional and temporary measure.
We have been asked why there was no help for vessels of less than 80 ft. in length. The subsidy scheme was limited to vessels of 80 ft. and more and it has


been explained to those who have queried our decision that my right hon. Friend is prepared to consider any well-founded case. So far, no detailed proposals have been received.
It would be dangerous to be precise in advance of receiving claims, but it is estimated that about 40 per cent. of the aid under the subsidy scheme may go to the Hull owners. We have also been asked about the modernisation of the docks at Hull, and the possibility of the Government writing off the capital debt in respect of the modernisation of the fish docks there has already been raised by some vessel owners. The same possibility has also been raised in respect of Grimsby and Fleetwood, but during the informal discussions with the vessel owners they formed the view that, in the short term, such relief might be insufficient.
If fish catching is affected, the processors are also affected, and the Government are conscious that changes in the pattern of supplies have affected the processing industry. Imports have helped to maintain supplies and the market has also obtained overlanded supplies from other United Kingdom ports and some landing from Icelandic vessels, albeit at irregular intervals.
My hon. Friend mentioned the plentiful supplies of blue whiting. The Government have given assistance to encourage vessels to catch blue whiting. The British Fishing Federation asked my right hon. Friend for aid for the deep sea sector in the autumn and has recently sent the figures in support of its case. The matter is being discussed with the federation at official level. Specific aids in connection with the catching of blue whiting might be one means of directing assistance to the deep sea industry if it can be justified, but I cannot anticipate any decision by the Government.
Blue whiting is plentiful, but my hon. Friend realises, as do we all, the problems involved in the filleting, processing and marketing of the fish. The Government are already making a significant contribution to research on blue whiting through their own laboratories. My hon. Friend referred to the Lowestoft laboratories and their contribution to the research and development carried out by the White Fish Authority. I have per-

sonal recollection of the research into the catching of blue whiting by the "Arctic Privateer". I remember seeing it coming in, I think at Easter 1976. Now, of course, the "Privateer" is the "G. A. Reay", and I was very pleased to attend its commissioning not long ago.
All this is basic to the eventual exploitation of the blue whiting stocks.

Mr. James Johnson: Can my right hon. Friend confirm that firms such as Findus and Birds Eye have modem German filleting machines which can cope with blue whiting? They can make and are making fish fingers, but they are importing the blue whiting. I want my people to catch them, so that we can use our own stocks.

Mr. Bishop: I note what my hon. Friend says, but he will be aware that research into processing is also taking place at the Torry research station in Aberdeen, which is run by my Ministry. But I am also aware of the research done by other companies, including those to which my hon. Friend referred.
My hon. Friend's concern for the industry has, of course, brought him into various other activities. I am aware of the suggestions, for instance, about the establishment of a European fishing centre at Hull. I think that my hon. Friend was one of those involved in this. I am aware, of course, of the suggestions which have been made, and they have been noted. I recollect that this suggestion was one of many in the admirable publication "Fishing into the Eighties" for which my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) was responsible. It will be interesting to see whether any further support for a European fishing centre emerges from the proceedings of the fishing conference which takes place at Hull next week.
My hon. Friend the Member for Kingston upon Hull, West referred to the decasualisation of the trawling industry. The Government remain very keen that progress should continue to be made with a scheme of decasualisation, and are doing all that they can to encourage the industry to reach an agreement on a scheme of decasualisation, and I myself have attended meetings recently with both sides, chaired by my hon. Friend the


Minister of State, Department of Employment. I stress that it is the Government's earnest hope that the industry will be able to reach a firm agreement.
With regard to the structural proposals of the Community, it is known that all Community fishing fleets face unfavourable structural arrangements to some degree. That is why the European Commission has produced proposals with financial incentives aimed at encouraging desirable changes in structure. Recently, the Council instructed that they should be examined further at technical level and that a further interim measure for the inshore fleet should be examined. This is under review at present.
As for the possibility of further interim assistance to the deep sea sector, the British Fishing Federation raised the possibility with my right hon. Friend some time ago, and he asked its representatives to present a detailed case for examination. Recently the federation has supplied some information, and this is being looked at quite urgently.
With regard to long-term aid associated with restructuring, the Minister has received proposals from the fish catchers and the fish processors, and these are being evaluated by officials both in his Department and other Government Departments concerned. It will be appreciated that proposals designed to have long-term effect need very careful examination.
My hon. Friend made some reference to the prospects for Hull vessels in South Atlantic waters. Again, the Minister has written to my hon. Friend to advise him that the Government have now commissioned the White Fish Authority to undertake a desk study of the resources aspects of South Atlantic fisheries, and it is hoped that results will be available in April. In the meantime, I do not wish to speculate on the commercial prospects of these waters for United Kingdom vessels.
The Government have taken careful note of the views expressed by my hon.

Friend. It is a matter of public record that the Government have continued to receive solid and united support not only from the industry but from all parts of this House in their approach to the common fisheries policy negotiations. This support has been of great help in our negotiating position in Brussels.
My hon. Friend made some point about the prospects for fishing in other waters. In 1979, the Community has reached agreement on reciprocal fishing arrangements with Norway and Sweden, although the arrangements have yet to be approved by the Council. Discussions with the Faroe Islands and Canada are continuing, and it is the Government's aim to seek a fair balance of reciprocal fishing opportunities and an improvement in the United Kingdom's share of those opportunities in the Community. Our chief interest lies in obtaining a satisfactory share of Community quotas in Norwegian and Faroese waters, and we have said that we are prepared to agree limited quotas for Sweden in the North Sea, although we have not fished on Swedish waters, on consideration that the Norwegian and Faroese agreements are dealt with to our satisfaction.
The Government hope that the next round of the CFP discussions, probably towards the end of March, will enable the current uncertainties facing the industry to be resolved as soon as possible. I can assure the House and the wider audience beyond our shores that there is no wavering in our determination to secure a fair settlement that takes account of the extent of fishery resources in waters under our sovereignty and jurisdiction and the extent of the losses of our fishing opportunities—

The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant ot the Standing Order.

Adjourned accordingly at eleven minutes past Twelve o'clock.